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TABLE OF CONTENTS
UNIT
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Unit - III Training and Development
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Objectives
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ӹӹ To familiarize the students with methods and techniques of
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HRM
ӹӹ To equip them with the application of the HRM tools in real
world business situations. s.
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Unit-I
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Unit – II
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Unit-III
Human Resources Development –Training and Development
Methods - Design & Evaluation of T&D Programmes - Career
Development - Promotions and Transfers - Personnel Empowerment
including Delegation - Retirement and Other Separation Processes.
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Unit-IV
Financial Compensation- -Productivity and Morale - Principal
Compensation Issues & Management - Job Evaluation - Productivity,
Employee Morale and Motivation - Stress Management - Quality of
Work Life.
Unit – V
Building Relationships – Facilitating Legislative Framework -
Trade Unions - Managing Conflicts - Disciplinary Process - Collective
Bargaining - Workers Participation in Management - Concept,
Mechanisms and Experiences.
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REFERENCES
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Venkata Ratnam C. S. & Srivatsava B. K.,PERSONNEL MANAGEMENT
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AND HUMAN RESOURCES, Tata Mc-Graw Hill, NewDelhi,,
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Delhi,2010
Snell, Bohlander & Vohra, HUMAN RESOURCES MANAGEMENT,
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UNIT – I
Lesson Outline
ӹӹ Nature of HRM
ӹӹ Definition of HRM
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ӹӹ Development of HRM
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ӹӹ Environment of HRM
learning objectives
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After reading this lesson you should be able to
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ӹӹ Define HRM
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Introduction
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Men and resources are involved in all activities. Men were taken
for granted for a long time. Greater accent was given to resources,
production machinery and top managers. But during the last few decades,
with modern large scale production of innumerable products for a wide
market, the importance of human resources and their development has
come to the fore. The importance of human resources to any organization
need not be over-emphasized. Human resource is the wealth of a nation
and an organisation. The development process is wide and varied. In
this lesson, let us understand the importance and concept of Human
Resources Management. (HRM).
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Human Resources
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classifies human capital into three categories – intellectual capital, social
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capital and emotional capital. Intellectual capital consists of specialized
knowledge, tacit knowledge and skills, cognitive complexity and learning
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capacity. Social capital is made up of network of relationships, sociability,
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and trustworthiness. Emotional capital consists of self- confidence,
ambition and courage, risk-bearing ability and resilience”.
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effective use of human resources so that the set goals are achieved.
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Definition of HRM
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HRM can be defined as a process of procuring, developing and
maintaining competent resources in the organization so that goals of an
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organization are achieved in an effective and efficient manner. In other
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words HRM is an art of managing people at work in such a manner that
they give best to the organisation.
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Significance of HRM
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they have even moved a generation ahead with their organisations. But
they still have managers who have been shaped by old models. They
are essentially a group of first generation managers whose definitions
of roles and tasks, personal skills and competencies, ideas and beliefs
about management have been shaped by an earlier model. You cannot
manage third generation strategies with second generation organizations
and first generation managers to meet the needs of second generation
organisations and third generation’s strategic thinking.
The above view indicates the role of HRM in Indian industry.
Significance of HRM can be viewed in three contexts; organizational,
social and professional.
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Organizational significance
Social significance
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This aspect aims in achieving the need satisfaction of personnel
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in the organisation. It is often said that a happy worker is not only happy
in his work place but also at home and in society also.
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Hence HRM seeks to achieve the following
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1. Maintaining balance between jobs and job-seekers, taking
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aptitudes
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government rewards.
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Professional Significance
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Concept of HRM
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any challenge.
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2. They can be trained to do efficient work.
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3. Necessary climate can be created to increase their efficiency.
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4. Environment and their liberties can be increased to create a
congenial atmosphere.
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Development of HRM
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as an outcome of industrial revolution, were very pathetic. The first
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world war worsened the situation. The Royal Commission of Labour in
India in 1911, under the chairmanship of J.H. Whitely, recommended
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the abolition of the ‘Jobber’ system and the appointment of labour
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officers in industrial enterprise to perform the recruitment function as
well as to settle workers’ grievance. Workers also started forming ‘trade
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unions’. The Trade Union Act, 1926 was passed in India. The basic
object underlying trade union was to safeguard the worker’s interest and
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to sort out their problems such as use of child labour, long hours of work
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on his shop floor job experience.
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Taylor developed four principles of scientific management
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1. Development and use of scientific methods in setting work
standards, determining a fair work, and best way of doing work.
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They were
1. Time study – to measure the time taken to each job and each
operation and to standardize the operations of the job.
2. Motion study – to study body movements in workplace and to
reduce wasteful motions.
3. Standardization of tools, equipments, machinery and working
condition.
4. Incentives – wage plan with differential piece rate for efficient
and inefficient workers.
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Human Relations Era
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During the years 1925 to 1935, experts expressed their opinions
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towards the human aspects of organisation activities. Hugo Munsterberg
in his book, “Psychology and Industrial Efficiency”, suggested the use of
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psychology in selection, placement, testing and training of employees
in an organisation. Elton Mayo and his associates conducted a series of
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is more effective in influencing people to achieve standards of
performance. According to their view, democratic leadership
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style of the manager is more acceptable to the subordinates and
hence more effective.
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3. By nature, people do not dislike work. Most people enjoy work
and one is motivated by self control and self development. In fact
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At the heart of the systems approach is a Management Information
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System (MIS) and communication network for collection, analysis and
flow of information to facilitate the function of planning and control.
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Modern thinkers consider HRM as a system that integrates activities
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with an objective to make the best use of resources which are always
scarce.
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all situations. According to this approach, the best way to manage varies
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particular approach may yield fruitful results in one situation but may
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Like U.K and USA, the evolution and development of HRM in India
was not voluntary. After second world war difficult conditions erupted
in India. Malpractices in the recruitment of workers and payment of
wages led to trade union movement. In 1931, on the recommendations
of The Royal Commission of Labour, ‘Jobber’ system was abolished.
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After independence, the Factories Act, 1948 laid down provisions for
Labour Officers, Labour welfare, safety and regulation of working hours
and working conditions.
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professionalism in managing organizations became quite discernible
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by 1970s. There was a clear shift from welfare approach to efficiency
approach. The two professional bodies IIPM & NILM merged in 1980 to
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form National Institute of Personnel Management (NIPM) with Kolkata
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as headquarters.
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Evolving along the years, the approach has shifted to human values
and productivity through people. It is against such a shift in managing
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Relevance of HRM
Change management
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Competence
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In any organization, it may not be feasible to allocate tasks to
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individuals at which each one excels. But it is possible to enhance the
competence of the individuals to specific tasks through well designed
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Commitment
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The extent to which the employees are committed to their work and
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Congruence of objective
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Motivation
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groom for higher responsibilities.
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Environment of HRM
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Environment comprises all those forces which have their bearing
on the functioning of various activities, including human resource
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Internal Environment
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NIPM & HR Professional Bodies
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NIPM regulates HR practitioners. As a member of NIPM, the
dictums are: s.
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As personnel Manager declare that I shall
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the profession.
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manner whatever in connection with or in the course of my
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professional work. and
demographic factors.
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Economic Factors
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Political Factors
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Technical
Demographic
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Demographic variables include sex, age, literacy, mobility, etc.,
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All these have different dimensions in employment and placement.
People management
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Men or personnel should be managed properly and effectively in
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People Management – Indian Scenario
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In the 50’s there was a strong belief that employees were recruited
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not to question ‘why’ but only ‘to do and die’. In the 60s, terms like
manpower, staff and personnel came to be used and instead of controlling
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changes. The work force of the 50’s and 60’s has retired. The middle
level is now at the top with the hangover of all middle class values. The
new generations of MBAs are pouring into industrial organizations.
Young executives in their mid 30s are heading HRD/HRM divisions
in big companies. Moreover due to very great strides in information
technology, there is a need to manage this tradition and give a direction
to this change process. The HRM strategies in India in the 21st century
are focusing on individual organization interface and greater emphasis
on organizational effectiveness than on personal success.
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1. Define HRM?
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Summary
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In this lesson you would have understood various aspects of and
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importance of HRM. The importance of HRM, that too in India was felt
only in the last few decades. The significance of HRM is wide and varied.
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approach.
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Answer Key
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****
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lesson outline
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ӹӹ Line Authority and staff Authority
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ӹӹ Departmentation
ӹӹ Organisation structure for HRM
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Learning Objectives
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Introduction
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A formal organization structure is required, since a large
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number of people are associated in achieving organizational objectives.
All of them perform various functions which are interdependent and
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interrelated. There should be a plan for systematic completion of the work
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of each specialized job so that the total activities accomplish common
objectives. Though an organization structure is required primarily to
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1. Facilitating Management
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2. Facilitating growth
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incorporated. With the increase in size, either the quantity of same work
increases, or diversification takes place: a sound structure facilitates
growth by increasing the efficiency.
4. Encouragement to personnel
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Psychological satisfaction to individuals in the organization is
needed. An individual contributes his best when his satisfaction is the
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most. Psychological satisfaction is largely derived from his work, his
relationships, and his work environment. Psychological satisfaction could
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be provided through good organization structure. A good organization
structure also develops provisions for training and promotional avenues.
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5. Creativity stimulation
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1. Simplicity
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2. Flexibility
3. Line of Authority
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bottom or in horizontal directions. The concept of clear line of authority
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implies that one should be clear about what he is expected to achieve or
contribute and what relationships should be maintained by him in his
official level. s.
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4. Ultimate Responsibility
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subordinates.
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5. Delegation of Authority
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6. Managerial Levels
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person having authority. Sometimes, the structure, if defective may lead
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to multiplicity of commands, making the subordinate in a fix as to whom
he is answerable. If there is a well grouped and arranged organizational
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structure, it may lead to desirable unity of command.
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8. Proper emphasis on staff
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examples for the line activity. On the other hand, contributions of staff
activities are indirect, that is, they help in carrying out the line activities
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1. Identification of activities
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2. Grouping of Activities
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Closely related and similar activities are grouped together to form
departments, divisions, or sections because coordination of numerous
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activities can best be achieved by grouping them into basic and derivative
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departments. Grouping may be done on several bases depending upon the
situational requirements. Grouped activities in the form of departments,
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Departmentation
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1. Specialization
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2. Coordination
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The best result can be achieved when all activities are performed
in coordinated way and each activity contributes in the positive way to
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others. Thus, the basis of departmentation should ensure that closely
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connected operations are put together.
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3. Control
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are being achieved and is according to the target and planning made. If
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the results are not up to the expectations or not in the line we thought of,
control mechanism should be applied. If the structure is properly made
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4. Economy
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5. Local conditions
6. Human considerations
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their aspirations and value systems, informal work groups, and attitudes
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of people towards various forms of organization structure. Often
organization structure is a major source of satisfaction or dissatisfaction
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to human beings. Departmentation scheme providing more human
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satisfaction is likely to contribute more to the organizational operation.
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Authority Relationships
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organization.
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Line Relationship
1. Chain of command
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A command relationship exists between each superior and
subordinate. Line authority is the heart of this relationship because it
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entitles a superior to direct the work of his subordinate.
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2. Chain of communication
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where everyone reports and also get reported. Such a line is maintained
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3. Maintains Responsibility
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Staff organization
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the plan into effect or he may try to secure voluntary acceptance of his
ideas from other managers without the support of formal orders through
line chain. In the second course the staff man can use his persuasive skill
to accept.
Despite all the efforts made by staff man, there is still a possibility
that real action may be taken in the area concerning his specialization
without his participation. To overcome this, some organizations prescribe
the practice of compulsory staff consultation. Under this arrangement, a
staff man must be consulted before action is taken.
Concurring Authority
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Under certain circumstances, particularly when control over
some operations is very important, a staff man may be granted authority
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so that no action can be taken until the concerned staff man agrees to
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it. For example, quality control inspector must pass on raw materials or
semi finished products before they move to the next stage of production.
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certain massive public sector projects may be taken by the state or centre
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Staff people feel that the managers do not make proper use of
their services and decisions are made without inputs from staff. But
however when something goes wrong in the area of his operation, staff
person from the concerned field is made the scapegoat.
Line managers often resist new ideas because new ideas mean
that there is something wrong with their present way of working. Thus
new ideas are treated as fault-finding device in their operation. Hence
the innovation of staff people goes waste.
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i. Divergent background
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Line and staff people, often have different backgrounds and
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individual characteristics. Staff people, are generally younger, better
educated, dynamic, and more poised in social interaction than the line
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people. This difference in outlook is one of the reasons for discord.
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ii. Lack of demarcation between line and staff
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are not many. Prof. Drucker has defined this type of organization as
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Though the authority of line and staff may be clear, yet in practice,
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people may fail to understand the exact nature. They may overstep and
this might result in mistrust.
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i. For creating harmony among line managers and staff people, the
following are the suggestions:
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ii. Line people who have the ultimate responsibility should have
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Functional type
Chief Executive
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Dev = Development
Advt = Advertisement
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Fig. 2.1(a) Functional Type Organization
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Pure product Type Organization
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Production Manager
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MD
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Audit Accounts Budget
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MR Sales Advt.
Proto
DEV
T.F.
PR
s. welfare
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P&A
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Abbreviations
M.D – Managing Director A & D – Research & Development
GM – General Manger MR – Market Research
Proto – prototype TF – Technology Forecasting
P&A – Personnel & Administration TPT – Transport
* - Staff managers
ADVT – Advertisement
DEV – Development
PR – Public Relations
CANT – Canteen
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HR director
HR information system
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Employee Employee Service
Maintenance and Benefits
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Manager Manager
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Fig. 2.1(d) Function Oriented Srtucture
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HR Director
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HR Managers for
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Self-Assessment Questions
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2. What are the pre-requisites of a good organization structure?
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3. How should an organization structure be designed?
Summary
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Answer key
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unit of command and good staff function.
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3. Various factors to be considered before modeling organizational
charts.
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4. Staff authority – advisory – specialists line authority – direct
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superior and subordinate Advantages of staff authority and needed
coordination.
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Lesson Outline
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ӹӹ Industrial Relations
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ӹӹ Integration of Various Sub-systems
Learning Objectives s.
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After reading this lesson you should be able to
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Introduction
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“Users reinvest too many dollars in the annual costs of the progressive
maintenance, a euphemism, for a wide range of failures, which may not
be a direct result of the computer programme, but simply a “system”
oversight.
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the results, a “Think Tank” was established for further analysis in other
segments.
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Definition of Terms
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“A system is an organized whole designed to work
System together to achieve a common aim consisting of sub-
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systems”.
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System Approach
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other. This relationship is not natural, given or unalterable in
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a social system. Any change in one part may affect other parts
depending on the type of relationship among those parts.
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ӹӹ A system is not merely the totality of parts and subparts but their
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arrangement is more important. Because of this arrangement, the
whole becomes greater than the sum total of parts and subparts.
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3. Adaptive
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continuously adjust to changing environment. Management tends to
achieve environmental constancy by bringing the external world under
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control, or bringing internal modification of organizational functioning
to meet the needs of the changing world. As there is a provision of
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feedback mechanism, management can evaluate its performance and
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take corrective actions. In fact, the basic role of HR management is in
terms of its’ adaptability to environment.
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4. Dynamic
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5. Probabilistic
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7. Multivariable
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simple cause – effect phenomenon. Rather an event may be the result of
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so many variables which themselves are interrelated and interdependent.
This aspect of interrelatedness and interdependence makes managing a
quite complex process. s.
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8. An Integrated Approach
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It identifies the reason for a phenomenon in its wider context taking into
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HRM tries to integrate the various factors to find out the reasons behind
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Subsystems in HRM
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Staffing Development
Subsystem
Subsystem
Industrial Relations
Appraisal
Subsystems
Subsystem
Human Resource
Maintenance Motivation
Subsystems Management Systems
Subsystem
Integration Compensation
Subsystems Subsystems
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Fig. 3.1
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The various subsystems are connected to each other and all
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subsystems are connected to the main system viz., HRM system. Each
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subsystem contributes to the main system and to the organization as a
whole. If a particular sub-system does not work properly it has negative
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impact over other subsystems, just like defective part in a machine spoils
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other parts and renders the machine ineffective. There should be proper
balancing among different subsystems of HRM.
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Staffing
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Sources of Recruitment
ӹӹ Internal
ӹӹ External to the organization.
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Need for External Recruitment
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ӹӹ Lack of adequately qualified and experienced persons within the
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organization.
ӹӹ Inducting persons of specialized knowledge.
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ӹӹ Campus Recruitment.
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ӹӹ Personnel Consultants.
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ӹӹ Professional Bodies.
ӹӹ Private Recruitment Agencies.
ӹӹ Employment Exchange.
ӹӹ Trade Unions.
ӹӹ Recommendations of Existing Employees.
ӹӹ Solicited Application.
ӹӹ Unsolicited Application.
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Advertisements
ӹӹ Details of Vacancy.
ӹӹ Number of Vacancies.
ӹӹ Scale of pay.
ӹӹ Minimum qualification.
ӹӹ Minimum Experience.
ӹӹ Desirable qualities.
ӹӹ Reservation of vacancies.
ӹӹ Mode of applying – last date.
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Selection process
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ӹӹ Short listing.
ӹӹ Application blank. s.
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ӹӹ Tests.
ӹӹ Interviews.
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ӹӹ References
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ӹӹ Medical Examination
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ӹӹ Final Selection.
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Method of Training
ӹӹ Orientation training
ӹӹ On the job-training
ӹӹ Simulation (vestibule) training.
ӹӹ Class room training
ӹӹ Apprenticeship training
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ӹӹ Industrial training
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Wage and Salary Administration
evaluation.
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Job Evaluation
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1) Qualitative Method
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a. Ranking Job comparison method
b. Job classification / Grading method
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2) Quantitative method
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a. Factor comparison method
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b. Point comparison method.
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MERIT RATING
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Administrative objectives
ӹӹ Wage increase
ӹӹ Promotion
ӹӹ Selection and special assignment
ӹӹ Training
ӹӹ Transfer
ӹӹ Discharge
Personnel Development
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b) Helps motivation by knowing one’s own performance and
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achievements
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c) Encourages persons to do better by getting recognition and
reward of his good performance
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d) Encourages a spirit of competitiveness to perform better.
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ӹӹ Motivation
ӹӹ Morale
ӹӹ Reduction of expenses on training
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Transfer
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Transfer is the movement of a worker from one job to another job
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which does not involve substantial change of pay, status or responsibility
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within an organization which may or may not involve change of place.
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Demotion
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Discharge or Dismissal
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the pay roll of the organization. There are two reasons for discharge
a. Unsatisfactory performance
b. Grave misconduct
Lay – Off
S.2 of the Industrial Disputes Act 1947 defines Lay off as follows:
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Compensation
Wage Incentives
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Time wage rate: Payment made on basis of time such as hourly,
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daily, weekly and monthly.
Real wages: Real wages represent the goods and services which
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can be purchased from the money obtained from the wages.
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Wage payment plans
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Incentives
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ӹӹ Direct Incentives
ӹӹ Indirect Incentives
ӹӹ Financial Incentives
ӹӹ Semi-Financial Incentives
ӹӹ Non-Financial Incentives.
Motivation
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Integration
All the aforesaid themes are to be integrated and one should not
work in isolation.
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Maintenance
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Everything should go on smoothly and there should not be halting
or interruption at any point. s.
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Industrial Relations:
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Industrial Disputes:
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Financial Factors
ӹӹ Wages
ӹӹ Allowances
ӹӹ Bonus
ӹӹ Financial
Working Condition
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ӹӹ Shop floor facilities.
ӹӹ Safety and Health hazards.
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ӹӹ Modernisation of production techniques.
ӹӹ Better facilities of working.
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Management Factors
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ӹӹ Personnel policies.
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ӹӹ Recruitment policies.
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ӹӹ Promotion policies.
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Union Factors
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i. Works Committee.
ii. Grievance settlement authority.
iii. Conciliation officer.
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Self-Assessment Question (SAQs)
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1. Define the term system.
2. s.
Explain the need for adaptive system for HRM.
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3. Explain the sub-systems of HRM.
4. Explain job evaluation and merit rating.
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Summary
A system is an organized whole designed to work together to
.a
control.
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1. Staffing sub-system.
2. Development sub-system.
3. Appraisal sub-system.
4. Motivation sub-system.
5. Compensation sub-system.
6. Integration sub-system.
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Answer Key
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3. See second paragraph of summary.
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4. Job evaluation is the evaluation rating of jobs to determine their
s.
position in job hierarchy. Merit rating is a systematic periodic and
objective performance evaluation of labour and ranking the workers.
bu
5. If sub-systems work in isolation, the desired objective cannot be
la
****
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Lesson Outline
ӹӹ HRM objectives
ӹӹ Functions of HRM
ӹӹ Emerging functions of HRM
ӹӹ Personnel Management & HRM Differences
m
ӹӹ Role of HRM in strategic management
co
Learning Objectives
s.
After reading this lesson you should be able to
bu
ӹӹ Understand the functions of HRM
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Introduction
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m
b) Benefits
Smooth union management rela-
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1. Societal objectives c)
tions
a)
b) s.
Human Resource planning
Employee relations
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c) Selection
d) Training and development
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g) Assessment
lls
a) Appraisal
b) Placement
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b) Appraisal
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d) Compensation
e) Assessment
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Acquisition Development
H.R. planning,
Training, Career
Recruitment,
Development and
selection and
HRM Internal Mobility
placement
Control Maintenance
m
H.R. Accounting Motivation
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H.R.Information
H.R. Information System Health &safety
system
Social security
Functions s.
bu
The functions performed by managers are common to all
organization. Generally the functions performed by Human Resource
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i) Managerial Function
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Managerial Function
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Planning
Organising
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HRM Functions
Managerial Operative
Function Function
Planning
Organizing
Directing
Controlling
Procurement Development Compensation Integration Maintenance
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a) Job analysis a) Performance a) Job Evaluation a) Motivation a) Health
b) Human b) Training b) Wages Salary b) Job-Satisfaction b) Safety
Resource c)Executive Administration c) Grievance c) Social Security
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c) Planning Development c) Bonus & Redressal d) Welfare Scheme
d) Recruitment d)Career Planning Incentives d) Collective e) Personnel Records
e) Selection & development d) Pay Roll Bargaining f) Personnel Research
f) Placement
g) Induction s.
e) Conflict
Management
g) Personnel Audit.
bu
h) Transfer f) Participation of
i) Promotion Employees
j) Separation g) Discipline
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Staffing
lls
Directing
Controlling
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m
for individual jobs within an organization.
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ӹӹ Forecasting the human resource requirements necessary for the
organization to achieve its objectives – both in terms of number
of employees and skills.
s.
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ӹӹ Developing and implementing a plan to meet these requirements.
ӹӹ Recruiting and selecting personnel to fill specific jobs within an
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organization.
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employees.
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ORGANIZATIONAL BEHAVIOUR
PERSONNEL INDUSTRIAL
MANAGEMENT RELATIONS AND
LABOUR LEGISLATION
Organisational Behaviour
m
It is a field of study that tries to examine why people behave
co
the way they do. It focuses on the behaviour of the employees at the
levels of an individual group and total organization. Topics such as
s.
motivation, job satisfaction, communication, supervision, inter and
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intra group behaviour, organization development, structures and designs
are examined to develop sensitivity to human factors in organizations.
la
Personnel Management
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lls
management.
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Personnel Management
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organization. Its objective is the maintenance of those relationships on a
basis which, by consideration of well being of the individual, enables all
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those engaged in the undertaking to make their maximum contribution
to the effective working of that undertaking”.
s.
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The various points that emerge from the above definition are:
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them.
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to the organization.
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HRM
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m
terms of which are linked to the exigencies of business, and conflict
is viewed as the result of negative inter-personal relations rather than
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structural contradictions.
s.
2. PM does not focus on strategic management. Its main goal is peaceful
or good labour-management relations. Its function is mainly reactive.
bu
On the other hand, HRM is a proactive function. HRM is not only
concerned with the present organizational needs but anticipates
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future needs and seeks to release the inner potential and creativity
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of people.
lls
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the premise that better performance itself is a source of satisfaction
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and high morale.
objectives.
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Environmental
opportunities &
threats
Activating strategic
Corporate Strategic Choice of Structural implementation
mission & alternatives Strategy Behavioural
strategy
objectives implementation implementation
Function implementation
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weakness
Role of HRM
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Acquiring
Developing
Integrating and
s. Retaining Personnel
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Strategy Formulation
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lls
Expansion of SWOT is
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S - Strength
W - Weaknesses
O - Opportunity
T - Threat
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Summary
m
HRM has many objectives such as i) societal objectives ii)
co
organizational objectives iii) functional objectives and (iv) personal
objectives. The various sub functions border on legal compliance,
s.
benefits, smooth union-management relationship, Human Resource
planning, Selection, training and development, appraisal, placement,
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assessment, appraisal and compensation.
la
But HRM takes a systems view and attempts not only in making people
w
Answer Key
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are managerial and operative. See the functions from the chart in the
lesson.
3. PM and HRM differences – see 8 points of differences listed in this
lesson.
4. Strategy formulation –SWOT analysis – HRM is linked with corporate
strategic management – Strength & weaknesses of HR could be
transmitted by HRM to the management for strategy formulation.
****
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s.
bu
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lls
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Lesson Outline
ӹӹ HRM Environment
ӹӹ Corporate Excellence
ӹӹ Role of Government in HR
ӹӹ MNC and HR Practices
m
Learning Objectives
co
After reading this lesson you should be able to
s.
bu
ӹӹ Understand the importance of environment on HRM
ӹӹ Comprehend the meaning and importance of corporate
la
excellence
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Introduction
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Internal Environment
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Unions
m
i) Secure fair wages for the workers;
co
ii) Safeguard security of tenure and better job conditions;
iii) Enlarge promotional and training opportunities
iv) s.
Provide for educational, cultural and recreation facilities
bu
v) Cooperate in and facilitate technological advances;
vi) Promote individual and group welfare;
la
organizations also have cultures. Each organization has its own culture
that distinguishes one organization from another. Culture may be stated
as sharing some core values or beliefs by the members of the organization.
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Professional Bodies
m
External Environment
co
Economic, political, technological and demographic factors have
s.
a bearing on external environment. These forces have considerable
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influence on HRM.
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Economic Factors
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production, national and per capita income, money and capital markets,
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Political Factors
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workers for their well being. The total political environment is composed
of legislature, executive and judiciary.
Technological Factors
m
Technology is a systematic application of organized knowledge
co
to practical tasks. Technological advances affect the HR functions in
more than one way. Firstly, technology makes the job more intellectual
s.
and upgraded. Secondly workers are to know and put in practice the
bu
upgraded technology, lest they are left out. Thirdly jobs and operations
become highly professionalized where the workers and employees of
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Demographic Factors
.a
Corporate Excellence
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m
vi. Higher work turnover.
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HR issues in Achieving Excellence
s.
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i. Aligning business strategy with HR strategy.
ii. Knowledge management and creating learning
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organization.
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enrichment.
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teams.
vii. Managing change through people.
viii. Restructuring and bringing transformation in the
organization to add value to the business.
ix. Bringing about rationalization of workforce through
internal transfers and resorting to employee reduction as
a last resort.
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marketing.
There are 10 P’s which are most important for corporate excellence,
most of them are to be shaped by HRM. They are as follows:
m
Plans Proper plans of action, translated to business policies
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The product should be innovative, qualitative and cost-ef-
Product
fective
Principles Set of values, culture and philosophy
s.
Challenging, ethical, committed, high performance, self-
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People
driven
Output of the organization, results in terms of both quantity
la
Performance-
and quality
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HRM is now a strategically important area of corporate
lls
Role of Government
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co
Other Assistance by Government
s.
Social security of employees comes within the fold of HRM.
bu
Government assists employees both in organized and unorganized
sectors through several social security schemes and directives.
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m
be treated as an employment injury arising out of and in the course of
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employment. The scale of compensation is stated under the Act and the
compensation is payable depending on the nature of injury and whether
it is partial disablement or total disablement. s.
bu
Employee’s State Insurance Act, 1948
la
salaried employees) whose income does not exceed Rs. 7500 per month
and are employed in factories, other than seasonal factories which are
w
run with power and employ 20 or more workers. The State Government
can extend the coverage of the Act with the approval of the Central
Government.
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Benefits
m
weeks of which not more than 6 weeks shall precede the expected
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data of her confinement.
1952
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which the Central Govt. notifies in its official Gazette. The Act does
not apply to cooperative societies employing less than 50 persons and
working without the aid of power. It also does not apply to those new
establishments till they become 3 years old.
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m
The Act is applicable to all establishments not covered under the
co
Employee’s State Insurance Act, 1948. The benefit will be administered
by the ESI Corporation.
s.
bu
Under the Act a woman worker is entitled to receive the payment
for maternity benefit at the rate of average daily wages for a period of 12
la
weeks. With effect from 1st February 1996, a woman worker is entitled to
yl
grant of leave with wages for a maximum period of one month in cases
of illness arising out of miscarriage, MTP or tubectomy. Women workers
lls
who will undergo tubectomy operation will get two weeks leave.
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termination of an employee.
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1. Works committee
co
2. Standing orders
3. Code of discipline
s.
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For settlement of industrial disputes the mechanisms are
la
1. Conciliation
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2. Arbitration
lls
3. Adjudication
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Tribunal are setup. The legal provisions are not elaborated since the
w
focus is on how the Government helps human resources and their rights
through legislative framework.
w
Trade Union Act 1926, gives permission to form and register Trade
Unions with rights and duties, to strengthen their bargaining power and
for obtaining rightful concessions from management.
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Cultural Factors
m
co
Individualism
s.
In simple terms, individualism means the degree of preference
bu
of individuals expected to look after themselves and their immediate
families. Just reverse is collectivism. Personnel should come out of the
la
Compensation
lls
cannot differentiate pay to the same category on the ground that they
w
are from different nationals. The perquisites should be the same to all.
w
The company would like all their personnel to follow the same corporate
culture that is in observance.
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Communication Skill
m
co
1. Explain internal environment having influence on HRM.
2. Explain external environment which have bearing on HRM activities.
s.
3. Explain the role of Government in the area of Human Resources.
bu
4. How does HRM practice with reference to MNCs have special
features?/What are the special features of HRM practice with
la
reference to MNCs?
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lls
Summary
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i. Trade Unions
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Answer key
m
1. Explain environment – Different internal environment and
co
consequently the approach needed by HRM.
2. External environment – outside the Company-Important external
factors and their bearing HRM. s.
bu
3. Role of Government is significant – Macro level planning – Training
programmes – Legislations and control.
la
Case Study
.a
for 20 years. During the last decade, the company had to launch new
products thanks to the proliferation of electronic systems. The new
product entailed additional investments in machineries and on additional
manpower. The new comers were raw hands requiring training at extra
cost. During the year, due to heavy investment on the new project, the
interest charges and depreciation completely wiped out the profit. This
means only the statutory minimum bonus of 8.33% of surplus was to
be offered as against the usual 20% that the workers are used to receive
in the last several years. The management needs to ensure maximum
cooperation from employees to maximize productivity. There was a
dispute that bonus payment is finance oriented and it does not necessarily
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reflect the productivity of the employees. The personnel officer felt that
if payments were based on the Bonus Act, it would deprive and de-
motivate employees during a crucial period.
Questions
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co
s.
bu
la
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lls
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UNIT II
Lesson Outline
ӹӹ Significance of HRP
ӹӹ HRP process
ӹӹ HR Gaps and Action plans
ӹӹ Factors influencing HRP
m
ӹӹ Guiding principles for HRP
co
Learning Experience
s.
bu
After reading this lesson you should be able to
la
Introduction
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m
From the above definitions the following features of HRP can be
co
identified.
s.
i. HRP is a process which includes various aspects through which
bu
an organization tries to ensure that right people, at right place
and at right time are available.
la
up necessary actions.
.a
Significance of HRP
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adopt a formal, meticulous HRP. Change in technology has attached
co
more premium to knowledge and skills resulting into surplus manpower
in some areas and shortage in other areas. HRP helps in creating a
s.
balance in such a situation because manpower needs and availability
bu
could be identified much in advance.
la
Jobs are becoming more and more knowledge oriented. This has
lls
increasing much faster than the average rate of inflation. This increasing
cost may be taken care of by proper HRP which provides the way for
effective utilization of such talents. In fact, such a high cost has forced
many companies to have a relook at their HRM functions and particularly
HRP and to align these with new situations.
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m
co
HUMAN RESOURCE PLANNING PROCESS
s.
This consists of a series of activities as follows:
bu
1. Forecasting
la
2. Inventory
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3. Anticipating problems
4. Planning
Planning for recruitment, selection, training, deployment, utilization,
transfer, promotion, development, motivation and compensation should
be undertaken for manpower requirement.
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co
Action plan for bridging gap
Organizational Objectives s.
bu
The starting point of any activity in an organization is its objectives
la
which generate various plans and policies. this leads to further course
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Identification Of HR Gap
m
Action Plans
co
Various action plans are devised to bridge the human resource
gap. If there is surplus of human resources either because of improper
s.
HRP in the past or because of change of organisational plan, such as
bu
disinvestment of business or closing down some businesses because of
various reasons, action plans may be devised to reduce their size through
la
2. Delphi Technique
3. Work-study Technique
4. Ratio-trend Analysis
5. Statistical and Mathematical Models.
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Delphi Technique
m
making in small groups. The problem and questions relating to HR
co
requirement and related issues will be circulated to the expert group.
Their suggestions and replies will be sent to others and if needed queries
s.
made and final decision taken. This exercise is repeated until some
bu
consensus is reached. Delphi technique is quite useful where the problem
cannot be solved by using analytical technique but its solution requires
la
needs in two forms. First, it can be used to know the trends for changing
job profile and consequently, the changing personnel profile across the
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volume of operation is .
Planned Output
Standard Output Per Hour x Standard Hours Per Person
m
production/sales level and direct operatives; ratios between direct
co
operatives and other personnel say supervisory and managerial
personnel. These ratios are worked out for a number of years based on
s.
the past records of the organization and future trends are projected on
bu
these ratios.
la
Forecasting of HR Supply
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logical to determine how these needs can be met. For a new organization
all personnel that are needed have to be procured from outside. But
in an existing organisation, existing personnel are a source for higher
positions. Armstrong has defined “Manpower supply forecasting
measures that number of people likely to be available from within and
outside an organization, after movements and promotions, wastage and
changes in work hours, and other conditions of work”.
m
of forecasts for human resources. Based on the analysis of this gap, action
co
plans must be developed to overcome this gap. In the end it may result
in reducing the personnel or increasing and recruiting the personnel in
different categories. s.
bu
Short-term Human Resource Planning
la
This may arise due to certain immediate vacancies that have fallen
yl
more personnel.
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will have some influence on the planning process. Some of the factors
are:
1. Government Influence
m
providing the data, companies have had to develop inventories of their
co
personnel, based on the various skill category classifications, which have
been used for their own internal manpower planning. The government
s.
has also fixed manpower quota for S.C /S.T and monitors the same.
bu
2. Social Factors
la
3. Economic Factors
w
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factor. Sudden rise and fall of demand for a product cannot be easily
estimated. These may be the result of government taxation policies, or
import restrictions. Sometimes recession and boom also may necessitate
change in HR requirements.
Technological Change
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Changes of this type may also require a change in the skills of employees,
as well as changes in number of personnel required. Automatic control
drastically reduces and changes the type of skill needed. For example
because of the introduction of computers, the skills requirements of
almost all the jobs have changed substantially.
m
ӹӹ Side effects and implications of the actions envisaged should be
analysed.
co
ӹӹ Instruction to individuals and departments must be incorporated
into the plan.
s.
ӹӹ Plans should be concise and easy to understand.
bu
la
HRP is not a static one-shot plan that will be useful over a period
of time for the organization; the data has to be continually updated and
yl
the various factors adjusted to reflect the changes that constantly take
lls
place.
.a
4. What is HR gap?
Summary
it has the right number of people and right kind of people at the right
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place, at the right time doing things for which they are economically most
suitable. HRP includes the estimation of how many qualified people are
necessary to carry out the assigned activities how many people will be
m
There would be both short – term and long – term HR planning. Various
co
factors influencing HR planning are i) Government, ii) Social Factors,
iii) Economic Factors, iv) Technological Factors.
s.
bu
Answer key
la
2) HRP process:
lls
4) HR gap – gap between demand and supply. The gap may be due to
w
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Lesson Outline
ӹӹ Why HRIS?
ӹӹ HRIS inputs
ӹӹ Benefits
ӹӹ Limitations
Learning Objectives
m
co
After reading this lesson you should be able to
Introduction
.a
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m
iv. Supplying data and submitting returns to government and other
statutory agencies.
co
s.
Formerly HR departments of various companies used to share
hardware and files with other departments. Later, companies began to
bu
develop information systems devoted exclusively to human resource
applications. These systems came to be known as HRIS.
la
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Storing
lls
Some of the applications which could be computerized and the
.a
nature and type of information that can be recorded and stored are
described below.
w
w
Personnel Administration
w
It will contain information about each employee, such as name,
address, date of birth, date of joining the organization, and information
about next of kin and family. The facility should allow the user to
maintain a number of address records such as permanent home address,
local postal address, and the address of next of kin.
Salary Particulars
Salary review procedures are an important function of the human
resources department. Details of present salary, last increase and the
proposed increase will all be compiled and stored.
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Skill Inventory
m
positions or job function.
co
Medical History
s.
bu
The HRIS may be used to record occupational health data
needed for industrial safety purposes, accident monitoring, exposure to
la
also be maintained.
.a
Accident Monitoring
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The system should record the details of the accidents for the
injured employees. This could highlight accident prone areas or accident
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Performance Appraisal
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HRP
Recruitment
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stored for HRIS.
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Career Planning
s.
Placement, training, selected candidates for career planning and
bu
supervisor’s view can be stored.
la
Collective Bargaining
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views, most welcome and least resistant measures may also be recorded.
.a
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Inception Of Idea
Feasibility Study
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Once the feasibility study has been accepted and the resources
accepted, a project team should be selected. The project team should
consist of a human resource representative, who is knowledgeable
about the organization’s human resource functions and activities, and
the organization itself, and also a representative from management
information system. As the project advances, additional clerical people
from the human resource department will have to be added.
m
normally deals with the details of the reports that will be produced. The
co
objective is to make sure that the mission of an HRIS truly matches with
the management’s needs of an HRIS.
Vendor Analysis
s.
bu
The purpose of this step is to determine what hardware and
la
software are available that will best meet the organization’s needs at the
least price. This is a difficult task. This involves discussions with various
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Contract Negotiations
.a
Training
Project team members may first be trained to use the system and
then they could train all users from other departments.
Data Collection
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Starting Up
Even after testing, some additional errors may crop up. These
errors surface during start up. These are to be sorted out.
Parallel Running
Just for the security, the new system is to be run in parallel with
the old till the new system stabilizes and people gain confidence in its
operation.
m
co
Maintenance
s.
Proper maintenance of the system and maintenance of secrecy
bu
of records are to be guarded. It normally takes several months for HR
people to get acquainted with HRIS.
la
Audit
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After a year or so, the project team should audit the performance
lls
because it enables them to collect, process and use large amount of data.
It links the various subsystems of HRM. Following is a figure of HRIS
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HR planning Recruitment Development HR
system system system mobility
Human
Resource
Inventory
m
co
s.
bu
Health Industrial Payroll
Appraisal Compensation preparation
Information relations
system system system
system system
la
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Advancement
Performance appraisal
Industrial Relations
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Benefits of HRIS
m
ӹӹ More transparency in the system.
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Limitations
s.
Following are the limitations of HRIS.
bu
ӹӹ Expensive in terms of finance and manpower requirement.
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is as good as no information.
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Summary
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Answer key
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i. Storing information and data of each individual employee
for future reference.
co
ii. Providing a basis for planning, organizing, decision
making and controlling of human resource functions.
iii.
s.
Knowing about the regularity of attendance and
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absenteeism if any.
iv. For supplying data and returns to government and other
la
statutory bodies.
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lls
****
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Lesson Outline
ӹӹ Recruitment
ӹӹ Selection – Differences
ӹӹ Selection tests
ӹӹ Interview
m
ӹӹ Induction
co
Learning Objectives
s.
bu
After reading this lesson you should be able to
ӹӹ Appreciate the differences between recruitment and selection
la
Introduction
.a
what types of jobs in how many numbers are to be filled up with the
qualifications fixed, the next step is for search of qualified people. Hiring
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1. Internal factors
2. External factors
Internal factors
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1. Size: The organizational size is an influencing factor. Larger
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organizations find recruitment less problematic than smaller
size units.
s.
2. Policy: The policy of recruitment by the organization, whether
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recruitment is from internal source (from own employees)
or from external sources also affect the recruitment process.
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External factors
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conditions, compensation, retirement benefits and safety and
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health of employees in industrial undertakings. Child Labour
(Prohibition and Regulation) Act, 1986, for example prohibits
s.
employment of children in certain employments. So also,
several other acts such as Employment Exchange (Compulsory
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Notification of Vacancies) Act, 1959, the Apprentice Act 1961;
the Factories Act, 1948 and the Mines Act 1952 have bearing
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on recruitments.
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lls
Sources of Recruitment
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b. External sources
Internal Sources
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Present Employees
Former Employees
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again be interested to come back to work.
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Employee Referrals
s.
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The existing employees refer their family members, friends and
relatives to the company as potential candidates for the vacancies to be
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Previous Applicants
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found good were not selected for one reason or other may be considered
at this point of time. Unsolicited applications may also be considered.
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1. Limited choice
2. Discourages competition
3. Creates conflicts.
External Sources
a. Employment Exchanges
b. Advertisements
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c. Employment Agencies
d. Professional Associations
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e. Campus Recruitment
f. Deputation
s.
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g. Word-of-Mouth
h. Raiding.
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Employment Exchanges
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Employment Agencies
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Advertisement
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make it clear and to the point. It must ensure that some selection among
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applicants takes place and that only qualified applicants respond to the
advertisement. Advertisement copy should be prepared very well to
s.
answer AIDA. That is, the advertisement should arrest attention, gain
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interest, arouse desire and result in action.
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Professional Associations
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Association etc., provide placement services for their members. For this,
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Campus Recruitment
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Deputation
Word-of-Mouth
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possible vacancies or openings in the organization. Another form of
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word-of-mouth recruitment is “employee-pinching” ie., the employees
working in another organization are offered an attractive offer by the
s.
rival organizations. This method is economic, both in terms of time and
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money.
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Raiding or Poaching
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the rival firms by offering better terms and conditions, try to attract
qualified employees to join them. This raiding is a common feature in
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Demerits
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Recruitment Process
a) Recruitment Planning
b) Strategy development
c) Searching
d) Screening
e) Evaluation and control
m
the skills, experience and qualifications needed ; grade and level of pay ;
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starting data ; whether temporary or permanent; and mention of special
conditions, if any, to the jobs to be filled.
s.
The next step involved is to devise a suitable strategy for
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recruiting the candidates in the organization. The strategic consideration
would include the type of recruitment method, the geographical area
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Selection
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Selection starts where recruitment ends. Selection is hiring the
s.
best candidates from the pool of applications. It refers to the process of
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offering jobs to one or more applicants from the applications received
through recruitment. Selection is the process of picking the suitable
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candidates from the pool of job applications to fill various jobs in the
organization.
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lls
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RECRUITMENT SELECTION
m
for the jobs.
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Selection involves comparing
4. Recruitment involves searching
those already searched.
s.
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Why scientific selection?
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the difference. Choosing the right person for the job is critical to the
organization’s success. Faulty selection or choice can have a far-reaching
lls
force. Though perfect match between the employee and the jobs is not
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Selection process
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Preliminary Interview
Application Blanks
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personal history profile, detailed personal activities, skills and
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accomplishments. Almost all organizations require job seekers to fill up
the application. Usual contents are as follows:
s.
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i. Biographical information – Age, father’s name, sex, nationality,
height, marital status.
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v.
vi. References – Name and address.
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Selection Tests
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co
Types of tests
s.
Broadly there are two types of tests viz., 1) Ability tests and 2)
Personality tests.
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Selection Tests
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lls
Ability Tests
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Aptitude Test
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Achievement Test
Intelligence Test
m
Mental age is generally indexed in terms of Intelligence Quotient (IQ)
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and is calculated using the following formula:
IQ =
Mental age
Actual age
s.
× 100
bu
la
get bright, alert employees quick at learning, it can train them faster than
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Judgment Test
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Personality Tests
Interest Tests
These tests discover a person’s area of interest and find the kind of
work that would satisfy him. The most widely used interest test is Kuder
Reference Record. It consists of three forms. The first form measures
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Personality tests
m
co
Projective tests
s.
These tests are based on pictures or incomplete items. The
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candidate is asked to narrate or project his own interpretation on these.
The way in which the candidate responds, reflects his or her own values,
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Attitude Tests
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Advantages of Testing
The merits of testing for selection are many.
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2. Analyzing jobs – Jobs are duly analysed to identify as to which
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human traits and skills are necessary for the job.
3. Choosing tests to measure characteristics – reliability, validity, ease
s.
of administration, and the cost involved are important criteria in
the choice.
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4. Administration of tests.
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Selection Interview
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Objectives of Interview
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Types of Interview
Four types of interview for selection have been identified. They
are:
1. Preliminary Interview
2. Patterned Interview
m
co
In this type of interview, the pattern of the interview is decided
in advance. What kind of information is to be sought or given, how the
s.
interview is to be conducted and how much time is to be allotted, all
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these are worked in advance. In case the interviewer drifts he or she
is swiftly guided back to structural questions. Such interviews are also
la
3. Depth Interview
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in depth and detail. Accordingly the life history of the applicant along
with his or her work experience, academic qualifications, health, attitude,
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4. Stress Interview
Such interviews are conducted for the jobs which are to be
performed under stressful conditions. The objective of stress interview
is to make deliberate attempts to create stressful or strained conditions
for the interviewee to observe how the applicant behaves under stressful
conditions. The common methods used to induce stress include
frequency interruptions, keeping silent for an extended period of time,
asking too many questions at a time, making derogatory remarks about
the candidate, accusing him that he is lying and so on. The purpose is
to observe how the candidate behaves under the successful conditions –
whether he looses his temper, gets confused or frightened.
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close tactfully providing satisfaction to the interviewer.
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6. The interviewers should show their sensitivity to the
interviewees sentiments and also should be sympathetic
towards him or her.
s.
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7. The interviewers should also evince emotional maturity and a
stable personality during the interview session.
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Reference Checks
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asked to give the names of one or two referees who know him personally.
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Physical Examination
The last tool used in the selection process is physical examination.
The main purpose of conducting physical or medical examination is to
have proper matching of job requirement with the physical ability of the
candidate. Among various objectives of physical test, the major ones are,
to detect if the individual is carrying any infectious diseases, to identify
health defects of an individual undertaking certain works determined
to his or her health and to protect companies from employees filing
compensation claim for injuries and accidents caused by pre-existing
ailments.
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Final Selection
Placement
m
be assigned, and his assignment to that job. It is a matching of what
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the supervisor has reason to think he can do with the job demands and
what he offers in the form of pay rolls, companionship” with others,
s.
promotional possibilities etc. The importance of placement is that it
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reduces employee turnover, absenteeism, accidents and dissatisfactions.
la
Induction
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and people already working there. In other words, induction is the process
of receiving and welcoming an employee when he first joins a company,
.a
and giving him basic information he needs to settle down quickly and
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the organizations.”
Objectives of Induction
1. To reduce the initial anxiety which all new entrants feel, when
they join a new job in a new organization.
2. To familiarize the new employees with the job, people, work-
place, work environment and the organization.
3. To facilitate outsider – insider transition in an integrated
manner.
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Formal Induction
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3. Policies and procedures of the organization.
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4. Rules and regulations of the organization.
5. Organization structure and authority relationship.
s.
6. Terms and conditions of the job including remuneration,
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working hours, holidays, promotional avenues etc.
7. Welfare measures like subsidized canteen, transport and
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recreation facilities.
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8. Safety measures.
lls
Information Induction
.a
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about the job, the department, routine and introduces to the colleagues,
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1. What is recruitment?
2. What is the difference between selection and recruitment?
3. Explain different selection tests.
4. State the importance of induction.
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Summary
co
Recruitment, selection, placement, induction, training and
s.
development are all the core functions of HRD. Recruitment is the process
bu
of locating, identifying and attracting capable applicants. Both internal
and external factors influence recruitment. Internal factors are the size
la
of the organization, policy of the organization, and the usage of the jobs.
External factors are demographic factors labour market, unemployment
yl
use of. Selection starts where recruitment ends. Selection is the process
of differentiating between applicants in order to identify those with a
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are i) Preliminary interview, ii) Application blank, iii) Selection tests, iv)
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Answer Key
m
4. Induction is the process of receiving and welcoming an employee
when he first joins a company, and giving him the basic information
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he needs to settle down quickly and happily and start work. There
can be formal induction and informal induction.
s.
bu
la
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lls
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Lesson Outline
ӹӹ Objectives of performance
ӹӹ Methods of performance appraisal
ӹӹ Modern methods of appraisal
ӹӹ Potential appraisal
Learning Objectives
m
co
After reading this lesson you should be able to
Introduction
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lls
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Objectives
m
The objectives of performance appraisal are as follows:
co
1. Salary increase
s.
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Performance appraisal plays a role in making decision about
salary increase. Normally salary increase of an employee depends on
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2. Promotion
.a
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4. Feedback
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this respect. Thus, appraisals can wok automatically as a control device.
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Performance Appraisal Process
s.
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Performance appraisal can be undertaken either on informal basis
or on formal and systematic basis. In comparatively smaller organizations
la
Defining Objectives
The first step in the systematic appraisal system is to define the
objectives of the appraisal itself. Appraisal is used for different purposes
from motivating the appraisee in controlling their behaviour. In each
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Designing Appraisal Programme
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In the design for appraisal programme, types of personnel to act
s.
as appraisers, appraisal methodology and types of appraisal are all to be
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decided. Ideally speaking all personnel of the organization should be
covered by the appraisal system. But generally various organizations keep
la
Implementation
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Appraisal Feedback
m
co
Methods of Performance Appraisal
a) Ranking method
b) Paired comparison
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c) Grading
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f) Checklist method
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i) Essay method
j) Field Review Method
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Ranking Method
Paired comparison
m
Paired comparison method is a slight variation of ranking system.
co
This method is adopted for use in the large groups. In this method, each
person is compared with other persons taking only one at a time. Usually,
s.
the only trait that is considered is the overall suitability to perform
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the job. The appraiser puts a tick mark against the person whom he
considers the better of the two, and the final ranking is determined by
la
Grading
lls
the worst.
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tick only one which appears to be more descriptive of the employee.
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Out of these two statements, only one statement is considered for final
analysis of rating. For example, an appraiser may be given the following
two statements. s.
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1. The employee is hard working
la
final rating is done on the basis of all sets of statements. This method is
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of statements.
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In this method, only critical incidents and behaviour associated
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with these incidents are taken for evaluation. This method involves
three steps. A test of noteworthy on the job behaviour (good or bad) is
s.
prepared. A group of experts then assigns scale values depending on the
degree of desirability for the job. Finally, a check list of incidents which
bu
define good and bad employees is prepared. The appraiser is given this
checklist for rating. The basic idea behind this rating is to apprise the
la
printed appraisal form is used for each appraisee. The form contains
various employee characteristics and his job performance. The
various characteristics are leadership, dependability, cooperativeness,
enthusiasm, creativity, analytical ability, decisiveness, emotional maturity
etc., depending on the level of the employee. Job performance includes
quantity and quality of work performance, specific targets achieved,
regularity of attendance etc. The degree of quality may be measured on
three point or five point scale. On five point scale, ‘excellent, very good,
average, poor or very poor’ may be used for measurements.
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Essay Method
m
5. Employee’s strength and weakness
co
6. Overall suitability of the employee;
7. Employee’s potentiality
s.
8. Training and development needs of the employee
bu
The essay method is useful in providing fruitful information
la
difficulty in free essay method is each appraiser may use his own style
and perception, which may give rise to difficulty in analysis.
lls
.a
reason is that such a person may take more objective view in appraisal
as he is not under pressure as the superior of the employee may be. The
appraiser , in this case, appraises the employee based on his records of
output and other quantitative information such as absenteeism, late
coming etc. The appraiser also conducts interviews of the employees
and his superior to ascertain qualitative aspects of job performance.
This method is more suitable for promotion purpose.
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5. The superior discusses the results of his evaluation with the
co
subordinate, corrective actions, if necessary and mutually
agreed targets for the next period would be fixed.
s.
Evaluation of appraisal by results springs from forces that have
bu
generated a popular philosophy of management, known as ‘management
by objectives’ or ‘management by results’. MBO is not merely a technique
la
on traits.
.a
BARS
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having similar critical incidents. Those behaviours which are approved
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by majority of personnel are kept for further development and others
discarded. The basic idea of this step is to keep the number of behaviours
s.
to a manageable limit and which are more descriptive of the job. The
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translation process assures the reliability of the critical behaviours
consistent with the job dimensions.
la
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Assessment Centers
m
by the War office selection Board for military situation. The objective
was to test candidates in a social situation, using number of assessors and
co
a variety of procedures. Gradually this concept crept in to industries and
companies. An assessment centre is a central location where managers
s.
come together and participate in a number of simulated exercises, on
bu
the basis of appraisers. The task Force on Development of Assessment
centre standards has recommended the following requirements.
la
yl
assessors.
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Objectives
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relatively large sample of the assesses’ behaviors.
co
b) The assesses’ behaviours are observed in simulated situations
which are close to the actual workplace and
c) s.
Since assessment is based on composite, pooled judgements
bu
of several appraisers, personal biases, false inference are
minimized.
la
yl
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Potential Appraisal
m
1. Determination of role dimension for which an employee’s potential
is to be appraised. The role dimensions can be identified by job
co
description and specification which provide information about
the responsibilities involved in a job and the attributes required.
s.
2. The mechanism for appraising these attributes in an employee
bu
should be determined.
3. Potential appraisal based on the scoring of attributes.
la
Summary
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evaluate how many of the employees have necessary skills and traits
co
to occupy higher position and responsibilities. Incidentally it will give
feedback to employees to improve themselves for future requirements.
s.
bu
Answer Key
la
accent on i. appraisal by results, ii. BARS, and iii. 360 degree appraisal.
w
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Lesson Outline
Learning Objectives
m
co
After reading this lesson you should be able to
s.
ӹӹ Understand the nature of HR requirements for virtual
bu
organization
ӹӹ Comprehend the imminence of BPO
la
Introduction
lls
The place and spread of MNCs are felt in every part of the world. India
w
and China are rated high as fast developing global business powers.
HRM issues and practices are assuming universal character with a need
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for adaptation.
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Virtual Organization
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Characteristics
co
Characteristics of virtual organization are
s.
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Power flexibility
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ӹӹ Informal communication
ӹӹ Flat organization
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ӹӹ Multidisciplinary teams
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ӹӹ Goal orientation
.a
ӹӹ Dynamics
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ӹӹ Homework
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ӹӹ Customer orientation
ӹӹ Sharing of information
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1. Absence of Para- verbal and non-verbal cues.
co
2. Limited social context.
3. Ability to overcome time and space constraints.
s.
bu
Emerging Hr Issues In Virtual Organization
la
are forms of managerial control. These inputs control and regulate the
antecedent conditions of performance, ensuring that the employee’s
lls
organization.
w
proficient people who are left to “do their own thing” in order to produce
w
The positive side in virtual job is greater job autonomy and more
financial stability, free transport, free lunch and clothing. The negative
side is increased working hours, work-related stress and changed social
relationship. Highly skilled workers are needed. Jobs are variable and
short term. People should be multi-skilled.
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HR Issues
m
6. Job status and project feedback is very short. Hence virtual
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organization requires a heavy investment to create systems
and staffing structures.
s.
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Performance Management
la
employees.
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by providing rewards.
Selection Process
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ӹӹ Adaptability.
ӹӹ Knowledge about organizational procedures.
ӹӹ Technical self-sufficiency.
ӹӹ Result – orientation.
BPO
m
co
HR aspects in outsourcing
4. Adaptability
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5. Culture adjustment
lls
6. Motivation
.a
One of the major changes led by IT is that it has hastened, what experts
call “fall of hierarchy.” Managers depend less and less on yesterday’s
“stick-to-the-chain of command approach” to their organizing function.
This is so because earlier it used to be, if one wanted information, one
had to go up, over and down through the organization. Now just one tap
would do. This is meant by the breakdown of hierarchy.
MNCS
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is yet another form of restructuring. As a part of the organizational
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changes, many organizations have “right sized” themselves by various
ways like eliminating layers of managers, closing facilities, merging with
s.
other organizations, or out-placing workers. There is also a practice to
bu
flatten organizations by removing several layers of management and
to improve productivity, quality and service while also reducing costs.
la
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Summary
m
A number of HR issues are involved in virtual organization.
co
Recruitment of highly skilled people, fast recruitment and sociability are
some of the issues.
s.
bu
Selection of personnel for virtual organization, BPOs require
special talent search. MNCs have added a new dimension to HR functions.
la
Answer key
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lls
1. Features
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Case Study
Downsizing efforts change into a retention move
The CEO of ZZZ Ltd assessed that the stock market seemed
to encourage reduction in the employee strength. She observed that
whenever any listed company announced plans to downsize, their share
prices went up, apparently attracted by the ensuing cost savings and
revenues per share. Hence ZZZ Ltd announced its plan to trim down
its present size of 1250 into 1000, which would mean a 20% cut. To
achieve this, the organization adopted measures like recruitment freeze,
retraining and redeployment and de-layering of avoidable intermediary
layers. Promotions were almost stopped and poor performers were
targeted for removal. To top it all, the organization began to introduce a
m
voluntary retirement scheme (VRS) with a reasonably attractive package.
co
Through this major initiative the CEO and his team of top management
expected to achieve most of the target for reduction. When the scheme
s.
was announced and voluntary applications were sought, it was dismaying
bu
to the top management that a whopping number of 700 employees,
including many of the highly rewarded good performers had applied for
la
VRS. The top management took some time to be able to reason out the
reason for the turn of events.
yl
lls
had set the rumor mill on that the organization was hiding its internal
w
moves set alarm bells inside them and they thought it to be prudent to
be the early birds in moving out of what they thought to be a sinking
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1. List out all possible reasons for the decision of majority of employees
to quit their present jobs.
2. Were the actual feelings of the employees reported in the case realistic
and justified reasons?
3. What would be the long term implications of downsizing decisions
that are driven by forces of stock market?
4. How do you think the organization should have planned for human
power reduction?
5. What would be the measures to be taken up towards controlling the
damage already set in?
m
co
s.
****
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UNIT – III
Lesson Outline
m
ӹӹ Need for and outcomes of impartial evaluation of training
programs
co
ӹӹ Five major levels of assessment of the effectiveness of training
programs
s.
ӹӹ Methods used for securing information and opinions necessary
bu
for the scientific evaluation of training
la
Learning Objectives
yl
lls
Introduction
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effort by management to improve employees’ competency levels and
co
organizational performance. Training has a short-term focus as it is
designed to provide the learners who are especially in the managerial
s.
cadre with specific concepts, knowledge, skills and techniques needed
bu
for their present jobs. Job related training is offered at various points in
an employee’s tenure with a company, on technical or mechanical facet of
la
life and social situation. Development refers to learning that is not tied
lls
event or experience from which new knowledge is created and then used
w
to improve situations.
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In the present context, one may surmise that the individual who
feels he is through learning is through in his job also. Jobs today grow
m
faster than the people in them. Helping people to keep up with the pace
co
of this growth is the obligation of training. No program or method would
fit all types of needs. Programs and methods should be selected on the
s.
basis of how effectively and efficiently they satisfy personal needs and
bu
accomplish the developmental objectives of managers and the enterprise.
la
target group, the aims of the program, the costs involved and whether
lls
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co
2. Group Discussion Method:
s.
It is a method used for knowledge and attitudinal development of
bu
trainees. In this method, sets of people examine several empirical studies
to find out commonalities to derive the underlying general principles.
la
They then combine their ideas and focus their attention on a given
problem at a time, speaking from multiple points of view within a group.
yl
various advantages of the method are that more ideas can be generated
from each session. Moreover each member gets an opportunity to present
.a
one’s own ideas and get feedback from members of the same group. Peer
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described in pairs such as trainer-trainee, buyer-seller, interviewer-
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interviewee and so on. Playing roles would entail practical problems
like inter-role conflicts, intra-role dilemmas, role overloads and role
s.
under loads. As a result of these hurdles, role confusion ensues. In
bu
order to be trained to perform roles, trainees must attain role clarity.
This may involve negotiation among the role senders and role receivers
la
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by encouraging them to interact freely and actively. The members are
co
enabled to recognize group dynamics and diagnose human relationship
problems. The participants are encouraged to communicate thoughts
s.
and feelings with each other in an open, unstructured, warm and honest
bu
manner than is typically done in the usual work or social situation. A
beneficial outcome of the method is that participants find better means
la
people may resent negative feedback and show anger in response. People
lls
amusement. Trainees are divided into teams and are given common
tasks on which they would be competing to arrive at decisions, and then
jointly implementing and evaluating the decisions taken with regard to
the games. For example, blocks of wood would be supplied to every team
and one of the members would be blind-folded with a piece of cloth. The
person would have to arrange the blocks one above the other, as per the
instructions and guidance of the other members. As they set on to reach
greater target heights, the rewards would also grow exponentially. This
game is used to bring out the nuances of teamwork, leadership styles and
communication patterns exhibited by the members while playing the
game. The demerits of the method are that, at times, games might result
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and seniority would have to learn to be natural in their behavior and get
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rid of masks worn in an office situation. It is an expensive method and
the learning might not be transferable to others or to other situations.
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9. In-basket Training (IBT) Method
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method has at least two main stages. At the outset, the participant
starts by working through the case within a specified time limit all by
himself without discussing the details with anyone. Subsequently, other
participants analyze and discuss the questions of who’s, which’s, how’s,
what’s, where’s, why’s and when’s of each decision or step. The merits
of this method include the best of traditional case study at the same
time combining the refinements to allow greater flexibility, realism and
involvement. The emphasis here is to understand things thoroughly,
which is an opportunity too rarely presented during busy working days.
It is done in a permissive atmosphere of experimenting and learning,
rather than within the confines of a boss subordinate relationship.
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This kind of training takes place away from the production area on
equipment that closely resembles the actual ones used on the job. It is a
type of off-the-job training in which employees get training in a realistic
job setting but in a location different from the one in which they would
be working. For example, a group of lathes may be located in a training
center where the trainees will be instructed in their use. The method
is used frequently for training typists and bank tellers, among others.
The word ‘vestibule’ means entrance. Thus vestibule training serves to
facilitate full-fledged entry into job. A primary advantage of vestibule
training is that it removes the employee from the pressure of having to
produce while learning. Disturbance of production or supervisor during
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training is minimized. The disadvantages include the extra investment
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on equipment and additional persons to be employed as trainers.
11. s.
Apprenticeship Training Method
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It combines classroom instructions with on-the-job training. It
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machinist and printer. The extensive nature of the training assures quality
outputs, though time consumed is long. Employees recruited from the
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direct participant observation of the crucial events that take place in the
present incumbent’s work life. The trainees are made to remain in the
company of the role model whose work is to be learnt by the trainees.
Trainees learn the intricacies of a job of high level, by physically being
in the presence of the job-holder. Closely following the styles of working
permits greater degree of learning besides helping the trainee to imbibe
the values and principles adhered to by the model. Yet, care needs to be
taken to avoid situations wherein trainees are not warmly welcomed and
are seen by supervisors in the department as obstacles to their routines.
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an instructor. To ensure a sequential approach to learning, instructions
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are designed in such a way that all future learning depends on acquisition
and retention of previous learning. In this method, the information is
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broken down into small portions called ‘frames’. The learner reads each
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frame in sequence and responds to questions designed to verify learning.
Based on the answers given by the trainees they are provided with
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other methods. First, this method stresses upon the sharing of expertise
by all the participants, unlike other methods where the instructor
supplies most of the inputs and might even look down upon trainees as
people who are ignorant or unskilled in the topic being covered. LSIE is
based on the belief that all the participants, by virtue of being in their job
for a certain period of time, possess some degree of expertise that need
to be shared and combined with that of others. Second advantage is that
this method transcends the limitation of other methods in terms of the
number of people who could be trained per batch. The major advantage
of this method is that a group as large as 300 – 400 members could be
trained simultaneously without losing the effectiveness of other training
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methods. The third advantage is the use of group processes. While the
trainer limits his role with a brief but inspiring presentation to stimulate
thinking of the participant, the methods pave way for active involvement
of all the participants who are assigned various roles such as sub-
group leader, recorder, summarizer, presenter etc. A fourth advantage
of the LSIE is that the group emphasizes on extensive on-the-spot
documentation of viewpoints expressed by people. Finally, the method
culminates in the entire large group addressing to the common issues.
At this stage, priority is to be set on areas of intervention and a plan
of action is drawn and accepted based on voting by members, thereby
building commitment of all the participants to implement the agreed
upon plans. A disadvantage of the method could be that it requires a lot
of volunteers to assist the proceedings.
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15. Personal Coaching Method
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It is an on-the-job approach in which a manager has the opportunity
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to teach an employee, usually his immediate subordinate, on a one-to-
one basis. Coaching helps the manager and others gain new perspectives
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trainee in an assigned position. Care should be taken by the organization
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to ensure that work efficiency does not suffer when a few trainees are
rotated into new jobs where they would be taking time to learn and
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perform. There could be some disadvantages of using the method of
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Job Rotation. Trainees have to be prepared to face contrasting styles of
operation and standards that vary according to superiors. Some trainees
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might feel more like visiting casual observers in the departments than
being a part of the workforce, which would negate the purpose of job
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and slow learners. But CBT method cannot reduce the learner’s anxiety
and fear, which can be done only by a trained instructor. CBT is well
suited for teaching facts but is less useful for teaching human skills or
changing attitudes.
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method are many. Many events and discussions can be put on one tape
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or CD. It is a handy method for small firms that cannot afford more
expensive approaches. It is particularly helpful for first-line supervisors.
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Observing a powerful model in the audiovisual form could help learn
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activities like mediating during conflict situations, handling customer
complaints and grievances. The challenges involved in using the method
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include the high level costs of one-time production in the initial stage.
Moreover, projectors and other expensive gadgets would be required
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in temporary jobs in which they can earn while they learn, with no
obligations towards any regular employment from the side of the employer
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Trainers continue to experiment on new techniques and construct
newer methods of training to achieve desirable impact. The training
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methods listed above is by no means exhaustive. Training specialists have
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also documented the use of a few other methods than those discussed in
this chapter. They are used occasionally for specialized needs of trainees
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Training Design
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Programs that the trainees are eager to attend, and in which they become
enthusiastically involved, are those in which they are encouraged to
present and attempt to solve the problem situations in which they have
a direct interest and in whose solutions they have a personal stake. The
pedagogy or method of instruction is to be decided based on the level of
education, maturity, time available and the cost involved. In general, it
may be stated that experiential and participative training would be more
effective than merely information-loaded programs. Rotation of training
methods could be carried out in accordance to the span of attention and
the stages in the cycle of learning among the trainees.
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provide training to an exponentially increasing number of trainees. In
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order to gain acceptance from all stakeholders of training, it would be
appropriate to begin training at a small level and then expand its base
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based on the success demonstrated after each program. Since training is
just one component of Human Resources Development, the organization
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would have to be urged to make improvements in the other components
like human resource planning, Performance appraisal and aspects of
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Training Evaluation
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not only assessing the quality of training imparted but also to see what
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to achieve the goals of the organization. While the first may be easy to
evaluate, the second poses complications. Hence it may be advisable to
commission comprehensive research studies through which opinions
and judgments on the training processes could be elicited from trainers,
supervisors, peer groups, which could then be cross-tabulated against
the responses of trainees. A comprehensive audit of Human Resource
Development functions should also include training programs under its
purview. Donald Kirkpatrick (1959) has contributed to the development
of a model for training evaluation.
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This is a quick, inexpensive approach to training evaluation.
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At this level, the trainees are provided with a feedback form in which
questions pertaining to the trainers, relevance of the topics, applicability
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of the learning outcomes, usefulness of the study materials, efficacy of
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the training methods adopted during the program and the quality of
physical environment that prevailed during training are included. The
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analyses of the responses indicate how far the trainees are satisfied with
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programs.
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Training may be assessed based on the extent to which the
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objectives set before conducting the programs have been attained after
the program. For example, safety training should have resulted in the
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reduction of number of accidents and an attitudinal training program
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focused on attendance should have resulted in reduced absenteeism. In
this regard, the comparison should be made with a corresponding score
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covered, the time allotted to each module, the qualifications of trainers,
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the extent of participation of the trainees, the budgetary constraints faced
by the organizers of the training program, the opportunity provided by
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the work atmosphere to implement the learning that was resulted from
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the training programs are to be considered while evaluating a training
program.
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to an organization’s very existence and growth, they would not be the sole
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Lesson Outline
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actions and motivators-developers.
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Learning Objectives
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ӹӹ To describe the various stages of Career Planning and
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Development
his or her own mission in life through employment. In other words, they
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long term needs of the organizations and at the same time equip them
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to meet the dynamic changes that would take place over a period of
time. This may involve several steps to be carried out by the employing
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organizations. First step would be to orient employees on the numerous
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career opportunities, choices and paths that might be available to them.
Subsequently, a detailed assessment of individual’s fitness for different
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end of their career. An individual could also shape one’s own career by
planning for it and reviewing, renewing and adapting the plan during
the entire work life. A dependable Career Strategy from an individual’s
perspective involves the following steps:
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attractive
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f. Preparing a set of guidelines and milestones for the career plan as
it is set into action.
s.
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Career Strategies
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The procedure of making the most out of one’s career begins at the
very beginning stage when a person selects the right company to work for.
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job and constantly improving skills by reading and learning from others
would be crucial in the early years of work life. Coping with challenges
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arising out of jealousy and power games within organizations and with
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the fast changing external environment call for a great deal of attention
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Career Anchors
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Career Stages
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There are four major career stages according to experts on career
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management. During the first stage there is considerable exploration.
The young employee searches for an identity and undergoes considerable
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self-examination and role tryouts. This stage usually results in taking a
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number of different jobs and is in general, a very unstable and relatively
unproductive period in the person’s career. At the end of the phase, a
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when the person levels off at a highly productive but plain period with
little growth. At this stage the person has a need for generativity, which
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develop deeper interests, reach super-ordinate positions and heighten
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his or her self-awareness. Their perspective tends to be focused on a
long-term rather than a short-term. This trend is likely to continue till
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retirement. Getting appointment to the first job, successful completion
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of the period of probation, gaining positive ratings in the appraisal could
be described as the path breakers in an individual’s career. However,
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boons to the employee as these employees would not have to face tough
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take the career aspirant as his protégé and as an ally.
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9. Supporting the superior: Helping the boss succeed and being
supportive at times of crisis could help to propel a person’s
career progression.
s.
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10. Willingness to move across different geographical locations and
across functional lines within the organization and outside it
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While filling vacancies in managerial positions, promotion from
within an organization is to be preferred to recruitment from outside
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because merit-based promotion is generally viewed as a reward for
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excellent services rendered by an employee. If seniority were not the sole
criterion for promotions, employees at all levels would be encouraged to
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area for a bigger job where the demands are quite different. Promotions
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on promotion.
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for the promotion and had been sure of reaching it. Frustration would
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be heightened if the person had taken a lot of efforts to be eligible
for promotion and if the next chance for promotion is remote. Being
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scheduled for promotion and getting dropped from the list would lead
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most people to feel the urge to quit their jobs.
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of whom would be chosen to succeed the present CEO. Since the three
names were already discussed openly in the media, they were well known
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to the public. Before choosing one from the three, the selectors raised
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the issue of how they would react if they were not selected as the CEO.
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All of them replied that it would be a loss of face to them in that case
and hence they would resign and quit the organization. Taking cues
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from this feedback, the organization realized that they would have to
find three successors to the positions occupied the candidates for CEO
and that an increasing number of successors would have to be found to
fit the lower levels.
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increase in productivity. The disadvantages of promotion from internal
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sources could be discontentment among other contenders for the same
position and scope for lobbying, bickering, frustration, unhealthy
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competition and alienation from erstwhile peers and the possibility of
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favoritism. Neglect of length of service and loyalty could be the result of
promotions not based upon seniority and they could attract resistance
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transfers. Transfers may occur within or outside functions, departments,
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units or divisions.
s.
Transfers serve a number of purposes. They may be carried out
to enhance efficiency in the utilization of human resources through the
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redistribution of work force’s size and strength according to changing
needs. A transfer is said to be a replacement transfer if it is caused due to
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department from which a person is transferred. Dual career couples
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might have objections when only one of them is transferred. Arbitrary
and discriminatory transfers can affect the employees’ morale.
s.
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In order to make transfers more pleasant and less troublesome,
employees must be explained the circumstances under which the transfer
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was initiated and the reason for choosing this particular employee
for the transfer. It is also important on the part of the organization to
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Transfers should be spaced out by years of gap and should have employee
development-orientation.
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to enable an employee to become involved actively, contribute his mettle
and help taking the whole firm or even an entire industry to new heights.
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These continuous efforts may take forms called as Empowerment and
Delegation.
s.
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Lesson Outline
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resignations and other separation processes.
ӹӹ The interdependence and inter-linkages of the human
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resource processes of an organization.
ӹӹ
s.
Concise and comprehensive description of key words and
phrases being used in the context of Personnel development
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Learning Objectives
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processes of separation
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Personnel Empowerment
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the access to information and resources and ability to share their views
to impact their own as well as organization’s future.
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Peters considered empowerment as a necessary condition to improve zest,
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creativity and automatic symbiosis with the customers. Empowerment
involves giving employees a greater degree of control in organizational
operations through management’s participation. s.
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Personnel Empowerment is a trust-based relationship. It can be
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performance.
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empowerment is found when workers become directors and become
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capable of codetermination. Empowerment is normally associated with
the practice of delegation at individual level and decentralization and
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flexibility in the organization in general. In short, empowerment has to
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cover the bases of supremacy such as information, personal charisma,
reward and coercive potential, expertise and position. Empowering the
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Theoretical Foundations of Delegation
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The classical principle of delegation states that decisions should
s.
be made at the lowest organization level.. Management By Exception
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(MBE) involves delegation. It hints at Frederick W Taylor’s exception
principle, which stated that managers should control by giving major
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management evokes resentment and cry for autonomy among the rank
and file employees in the organization.
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over-confidence of the supervisors and a belief that no one else can do
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the task better than them, are a few of the barriers at the level of the
delegating administrator. It takes courage to delegate because delegation
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does not absolve one from the ultimate responsibility. Often it is seen
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that responsibility is feared as much as authority is sought after.
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involved, where the work provides intrinsic job satisfaction, the work
group members accept the management’s objectives, the employee-
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of solving them are not necessarily those that their subordinates would
choose. Superiors could be induced to delegate more by making them
part of the team’s performance rather than their own. Where there is
a system of appraisal of the superiors by the subordinates, a parameter
for appraisal should the formers’ inclination to help the latter through
delegation and empowerment.
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for carrying out the delegated task. Once delegation begins, the everyday
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jobs of the junior employees should be monitored and assisted, till a
confidence level is built reasonably between the person in charge and
the subordinate. s.
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Retirement and Other Process of Employees’ Separation
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firm incurs separation costs in the form of severance pay known also as
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and training costs with regard to a new replacement into the vacant
position. Depending on who initiates the separation, some observers
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Retirement is the completion of service period of employees
on their reaching the age of superannuation. Retirement from active
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employment is intended not only to permit older workers to enjoy
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their twilight years without the everyday pressures of working, but
also to allow younger and capable employees to reach positions of
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generally prefer to pay hefty amounts and reduce staff strength rather
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than retaining surplus labor and continuing to pay them idle wages.
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role of people who retire even before their retirement. Most employees
prefer to postpone retirement until they reach superannuation. Hence
it is also the responsibility of any employer to plan and provide for the
future life of the retiring employee. In the present context, when the
lifespan of average citizen has gone up well above the retirement age,
retirement is to be put to reconsideration in terms of revision of the age
of retirement or alternative work styles like job sharing, home working,
freelancing and part-time employment during post-retirement period.
Lay off refers to the temporary separation arising out of the failure,
refusal, inability of an employer to continue to give employment to any
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Further, clear communication and counseling would be required to
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minimize the negative effects of such measures of downsizing. The
principle of last in; first out is advocated while prioritizing the people to
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be removed. Retrenchments might also occur due to global competitions,
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changing technologies that reduce the need for workforce, mergers and
acquisitions and reduction in product demand.
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must be given to the employee to know the rules, modify his behavior in
accordance to rules. He must be given an opportunity to explain his case
by appearing before an impartial team of enquiry when charged with any
misconduct. The management should never forget that any person who
leaves the firm is going out to represent the organization, either bad-
mouth or praise it.
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take care to appreciate if the employee engaged in any laudable activity.
A clear-cut, written-down policy on termination would help to prevent
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the fire-at-will practices by some managers.
s.
Discharge also means termination, but not necessarily an act
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of punishment. A discharge does not arise from a single, irrational
or unacceptable act. There could be a lot of reasons for a decision to
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reasons of better pay, working conditions, opportunities to learn and
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grow, or may cite ill health or domestic responsibilities to quit their
positions. In any case, they would be required to serve a notice period by
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which they would be able to handover their duties and responsibilities to
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another incumbent. Causes for resignations are investigated during the
exit interview wherein, the outgoing employee is requested to share his
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or retain their jobs, then the attention should be focused on the system
in which the work is done or on the job content itself, rather than the
individuals. Such jobs are called as “Widow-maker Jobs” in Management
Jargons of the west.
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Summary
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consultants helps in increasing organizational stability, promotes
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organizational learning, heightens performance and profitability, builds
an organizational climate of openness and trust, develops a culture
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of collaboration, boosts organization’s image and leads to its overall
vibrancy, pro-activity and development. PD is the foundation on which
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an organization can confidently build its strengths. Full utilization of
human resources would ensure that the organization has the optimum
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responsibility’.
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Self-Assessment Questions
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10. “Employee turnover is a multi-dimensional challenge to every
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organization” – Justify this viewpoint.
s.
11. Enumerate the changes taking place worldwide in the areas of
Human Resource development using best practices from different
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organizations.
Write a proposal for conducting a training program for a group
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12.
of middle-aged graduates so as to make them form a more cohesive team.
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organization.
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Case Study
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Analyze the Situation and Answer the Questions
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1. What are the causes of the difference between expectations and actual
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behavior on the part of the promoted employee?
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2. What would you recommend if you were the line manager entrusted
with handling this case?
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Glossary of Terms
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manage time better, to enhance the quality of the work output and in
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order to train people on the job.
8. Development: Learning opportunities designed to help employees
s.
grow, which need not be limited to improving employees’ performance
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on current jobs.
9. Downsizing: An organization’s strategy to reduce the present
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11. Glass Ceiling Syndrome: The view that even though women
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and the marginalized groups can get hired into organizations, they have
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**** s.
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UNIT IV
Lesson Outline
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ӹӹ Productivity – Factors that enhance and lower productivity
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Learning Objectives
s.
To understand the need for and importance of enhancing motivation at
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work place.
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different contexts.
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packages.
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Introduction
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highest goals can be achieved only by developing and maintaining a
loyal, efficient group of employees, who believe in the company, who gain
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satisfaction from their work, and from whom extraordinary achievement is
an individual ambition. In order to achieve these conditions a professional
s.
would need a strong foundation on the variables like morale, motivation,
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compensation and quality of work life, which are being elaborated upon
in this unit. In the absence of an amiable and cohesive human resource
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in Compensation
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and salaries have also been used interchangeably. Both wage and salary
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help to achieve effective employee performance.
s.
Wage is the part of total production that is the return to labor as
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earned income as distinct from the remuneration received by capital as
unearned income. Wage freeze refers to a temporary fixing of wages at
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– 11,000 – 600 – 14,000” implies that the salary starts with a basic of
Rs. 9,000/- followed by an increment of Rs. 400/- every year until 9,000
becomes 11,000. From then onwards, there would be an increment of Rs.
600/- in the Basic Pay until one reaches Rs. 14,000/- which is the final
limit of the present scale. Beyond this year, the person may be considered
for being placed on a higher pay scale or, the pay scales of the entire
organization could be reformulated.
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the following trends:
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ӹӹ Organizations began to pay scarce-skill premium. This gets skilled
people who are ineligible to be fixed at pay scales of higher echelons
s.
due to their junior status, but have very rare skills which are crucial
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to the success of organizations. The premium would continue as
long as the skill set remains to be rare.
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areas and others.
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ӹӹ The base salary range for Project Managers and senior technical
professionals has increased by 40% - 50% and even higher for
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in absolute terms.
ӹӹ There is a greater tendency now to structure compensation by
including anywhere between 10% - 50% of total compensation as
performance incentive / reward or flexible payments.
ӹӹ The attractiveness and usage of Employees Stock Option Plan
(ESOP) and similar schemes at entry level have come down
substantially. Many professionals look at ESOPs company.
ӹӹ Many more multinational and leading Indian companies in the
Information Technology area are now making a serious effort
to convey their HR orientation and are taking specific steps in
implementing multi-skill and behavioral training and introducing
pro-active employee retention schemes.
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Wage Policy
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Wage is the source of livelihood for the recipient employee while it
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is viewed as a production cost by the employer who pays it. Wage policies
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are principles acting as guidelines for determining wage structure. They
are expected to insure minimum standards of comfort and decency to
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on when to hire below/above the starting rates, the wage period by which
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wages are payable, provision for severance pay, the period for which each
wage revision would be applicable and whether increment is to be fixed
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‘take home’ pay, the lower and upper limits of wages and perquisites,
the wage differentials between the highest paid and the lowest paid
worker, possibilities of profit-sharing and such other matters, as may be
considered relevant. An organization establishes compensation policies
that determine whether it will be a pay leader, pay follower or strive for
an average position in the labour market.
Pay leaders are organizations that pay higher wages and salaries
than competing firms. Using this strategy, an organization would aim
to attract high-quality, talented and productive employees with whom
they could achieve lowering of per unit labor costs. Pay followers are
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organizations that choose to pay below the going rate in the market
because of a poor financial condition or a belief that they simply do not
require highly qualified employees. Difficulties occur when this policy
is followed, as only less committed, desperate and poorly equipped
personnel tend to join a firm with such policies of remuneration. Those
who choose to pay an average rate, appear to believe that they could
employ requisite number of qualified people at the same time remaining
competitive, as they would not have to increase the selling price of goods
and services on account of salaries paid.
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control for making changes in wage patterns. The policies might also
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cover the percentage of raises permissible during promotions, the cost
of living allowance (COLA) or the Cost of Living Indices and related
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adjustments to wages, rules for special raises, criteria for fixing annual
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increments based on merit and seniority and schemes of flexible payment
and benefits.
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choose to pay high salaries and confine themselves with the statutory
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Wage Fixation
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Wages may be of two types such as time rate and piece rate.
They are fixed with the help of industrial engineering and personnel
departments and are administered by the payroll departments, according
to the provisions of the payment of wages law at rates equal to or above
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the minimum wage law. Equal remuneration for equal work without any
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discrimination on grounds of gender has been guaranteed by the law.
Wage laws insist that wage be paid in cash and not in kind. They also
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state that the maximum permissible wage period would be thirty days.
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They even specify the list of deductions permissible, subject to a ceiling.
Some of the authorized deductions are recovery of loans, contributions
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Incentive Schemes
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better outputs from people. Incentive schemes are used to enhance the
motivation level by tapping the ambitions of the employees to earn
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Job Evaluation
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management group, and to similar management positions within a
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geographic region or an industry. While the shop floor and clerical
planners normally evaluate a job in terms of its duties, a managerial
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position is always evaluated in terms of responsibilities, which could
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include those related to making others perform their duties.
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happen the job evaluation has to be reviewed and amended to reflect the
change. Since job evaluation examines the effect of skills, capabilities,
.a
Job evaluation rates the job and not the person going to occupy
it. The cycle of job evaluation is launched first by way of creating a
committee of personnel trained in the process, consisting of heads of
various departments, representatives of employees and a specialist on the
field, along with the team of Human Resource Department. The team of
appraisers would use the job descriptions to determine the relative worth
of every job in comparison with others. In this process, the committee
should subject all the relevant external and internal factors into their
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Once the jobs that are to be evaluated are listed out, the committee
sets its tasks towards analyzing the jobs and preparing job description
statements with regard to each of them. The next activity would be
to select the method of evaluation to be adopted, keeping in mind
organizational constraints and the job factors. This activity is followed
by the classification of jobs in order of importance. Once installed, the
scheme of job evaluation should be reviewed periodically. The review
should also benchmark at model organizations emerging out to be the
best paymasters in the perception of prospective employees.
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Methods of Job Evaluation
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There are four commonly adopted major methods of job evaluation,
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each with their own inherent strengths. They are called ranking method,
job classification method, factor comparison method and point method.
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Ranking Method
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Thus all jobs are rank ordered and pairs of jobs could be compared. Prior
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to this, the organization would have to conduct job analysis and job
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between the jobs belonging to two ranks. Thus, the magnitude of the
difference between the jobs ranked first and second, may not be the same
as the magnitude of the difference between jobs ranked third and fourth.
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ӹӹ Working conditions, which reflect the environmental influences of
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noise, illumination, ventilation, hazards, annoyances and working
hours.
s.
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Point method is an approach to job evaluation in which numerical
values are assigned to specific job components and the sum of these
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factors on which each job must be evaluated. The collection of these key
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factor. Each job is rated on these key factors and a value is assigned
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accordingly.
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rates are established they are not applied to individual jobs but rather
to groups of jobs that are rated about the same number of points. In
choosing point factors, the organizations decide on the particular job
components that they should value. The advantages of this method are
that a large number of specific factors are included. Off-the-shelf, ready-
made plans are also easily available for a price from HR services and
consultancy firms. If an organization prefers to save costs by developing
a complete plan internally, it would be a time consuming process and
more difficult to understand. There is also greater opportunity for people
involved to disagree on many grounds.
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working conditions for some employees, might make a mockery out of
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job evaluations.
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Obtaining a precise value of an employee’s contribution to the
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organization might be difficult, as work output occurs due to the interplay
of large number of factors. Job evaluation helps to reach a reasonable
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the organization is not paying above market rate and if it results in too
drastic pay revisions within existing structures. At times, the geographic
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Productivity
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therefore lesser real wages than the past years for work of equal intensity
and hardship.
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income.
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Tom Peters and Waterman, the specialists on organizational
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excellence, have paid due emphasis on productivity improvements that are
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achieved through people. According to them, progressive organizations
would treat the ordinary members of the organization as the basic source
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very hard to cut the need for intrusive forms of corporate management,
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which might be in the form of outmoded, irrational or unreasonable
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rules or customs which unduly hinder the efficient use of labor. At times,
work groups might seek to maintain traditional rights and prerogatives
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in the context of changed circumstances and technological advance.
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Some times, wage-productivity linkage might have to be examined for
commensurability. Hence it might not be worthwhile for any manager to
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Many employers set the goal for making employees happy on the
assumption that this will lead to high productivity. This is possibly a
misdirected assumption. Managers who follow this strategy could end
up with a very happy but poorly performing group of employees. While
unhappy workers might become unproductive, happy workers are not
always productive workers. If feeling of satisfaction does have a positive
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effect on productivity, it has been found to be fairly small and negligible.
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Peak performance in an individual depends upon a myriad of variables
like visualization, positive self-concept, intense focus and concentration
while facing demanding situations. s.
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Factors affecting productivity would also differ according to
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system and local faults. He urged the managements to use statistical
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techniques to identify them and strive to constantly reduce wastes.
s.
Deming called for the elimination of the use of goals and slogans
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to encourage productivity, unless training and management support is
also provided. Close examination of the impact of work standards was
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Lesson Outline
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ӹӹ Meaning and types of Stress and management of Job Stress
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Learning Objectives
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ӹӹ To know the meaning, symptoms and classifications of stress
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and the stress management practices of organizations.
ӹӹ To understand concepts such as burnout, Distress and Eustress
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organization.
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Morale
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Signs of poor morale include sluggishness or tardiness, high
levels of employee turnover, constantly complaining about trivial issues,
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arriving late and leaving early, or taking off without any satisfactory
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explanation, dragging out tea-breaks and mealtimes to get the maximum
amount of time away from work, blaming colleagues, non-observance
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instructions.
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Signs of good morale are described by three words namely “staying,
speaking and sweating” by the employees. Staying refers to remaining in
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the organization despite getting lucrative offers from outside. The word
‘Speaking’ is used here to mean talking positively about the organization
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to its stakeholders. Slogging involves putting the extra effort for the
progress of the organization or bearing additional burdens for the benefit
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and others would influence morale. Morale would suffer the most severe
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Motivation
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Motivation according to Harold Koontz and Cyril O’Donnell
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(1982) is a general term applying to the entire class of drives, desires,
needs, wishes, wants and other similar forces. According to the
s.
Encyclopedia of Management, the term ‘Motivation’ refers to the degree
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of readiness of an organism to pursue some designated goals and implies
the determination of the nature and locus of forces including degree
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De-motivation
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to be soothing to the employee, assurances are given about something
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which cannot be carried out. Such hypocrisy and evilness noticed in the
management is one of the strongest de-motivators. A typical hypocrisy
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would be observed in an organization that is inviting “feedback” with
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“openness” from the employees, but in fact, using it as a tool to identify
the potential rebels in the workforce.
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people choose to do one thing rather than another, at certain times than
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others and also with the amount of effort or intensity of action that
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people put into their activities. Motivation can be defined as the will to
do, the urge to achieve goals and the drive to excel. Motivators are forces
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based on the secondary outcomes of work like pay or reputation. When
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work is monotonous and drudgery producing, it is more likely to be
done for outcomes like money, fame, power, etc., such factors in work
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are called extrinsic motivators. Motivation could be positive in the
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form of offering rewards or negative in the form of punishments and
warnings. Techniques of motivation includes provision of financial and
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dangers, which might include housing and job tenure, social needs such
as belongingness, love and affection, and esteem needs such as respect,
recognition and reward. Maslow separated the five needs by grouping
the first two into lower level and the remaining three into higher level.
The differentiation between the two orders was made on the premise
that higher-order needs are satisfied internally, whereas lower-order
needs are predominantly satisfied externally.
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substantially satisfied, the next need becomes dominant. The needs
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when translated into an organizational context would mean wages, job-
security, recognition, confidence and pride of excellence.
s.
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Alderfer’s Existence, Relatedness and Growth Theory
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under the label Existence, while love need was renamed relatedness
and self-esteem and self-actualization correspond to the growth needs.
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While the ERG theory accepted the usual movement from lower order to
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higher order needs, it also emphasizes the possibility of more than one
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need arising at a given time. Secondly, it states that if a higher order need
is not satisfied, an employee may regress into the pursuit of lower order
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need.
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skills, demonstrate achievements, chances to learn and grow, are made
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possible or available to the employees. Herzberg’s theory has contributed
to much of the enthusiasm towards job enrichment.
s.
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Douglas McGregor’s Theory X and Theory Y
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different strokes are meant to be given for different folks. The theories
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say that there are two main categories of workers namely the X type
and the Y type. First type of assumption is that people are basically
.a
lazy, dislike work and wait to be told formally about what is to be done
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theory believed that employees dislike work, it advocated that they must
be coerced, controlled or threatened with dire consequences to achieve
desired goals.
The other types of people like to work and produce results and
are self-driven. In order to make them work well, theory Y advocates
that the organization will have to merely create congenial conditions to
work and provide them with the autonomy and respect they deserve.
This is also referred to as the Carrot approach, a phrase arising from
the metaphor of tying carrots before horses to make them run forward
with desire, as against the opposite approach of using “stick” to cause
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pain and make a horse run faster with fear. Theory Y believes that once
given the right conditions, the rest would be taken care of by these
incumbents. Theory Y views employees from a positive perspective and
believes that employees can view work as bringing pleasure as natural
as rest or play and that the average person could learn to accept or even
seek responsibility.
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need. For instance, Indians usually have high need for affiliation
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while citizens of western nations are found to be high on the other
two needs.
s.
ӹӹ The relationship between achievement need and job performance
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has been well-supported by research. McClelland found that high
achievers differentiate themselves from others by their desire to
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others. They perform best when they perceive that their probability
of success as being 0.5, that is, when they estimate that they have
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an important contribution to managers’ understanding of motivation
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through his Expectancy Theory, which is an alternative to the content
theories. According to Vroom’s theory, individuals’ effort is based on
s.
their perceptions of certain factors in the work environment. They are
termed as Expectancy, Instrumentality and Valence. The strength of the
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motivation to perform a certain act will depend on the combination of
the three factors.
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individual. In order for the valence to be positive, the person must prefer
attaining the outcome to not attaining it. A valence of zero occurs when
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in the form of efforts, with the ratio of the inputs and outputs of another
comparable person and finds that it is to his disadvantage and that they
are being under-rewarded or over-rewarded. For example, when people
of same educational qualifications, age-group, experience-levels and
levels of intelligence quotient are placed, the first to be employed might
be placed in the regular cadre, while the subsequent appointed persons
could be placed in a contractual mode of appointment. Such practices
can bring forth feelings of inequity and de-motivation among the latter.
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and also includes friends, neighbors, or professional associates. On the
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basis of information they receive through word of mouth, newspapers
and magazine articles on issues such as executive salaries or a recent
s.
union contract, employees compare their pay with that of others.
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The “system” category considers organizational pay policies
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Motivation Potential of a Job – A model
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Oldham and Hackman (1975) devised a formula for identifying
s.
five factors collectively referred to as the Core Job Dimensions or
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characteristics. They developed a mathematical index describing the
degree to which a job is designed so as to motivate people, as suggested
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any particular job permits and utilizes a range of skills, abilities and
talents of the employees. If a job does not permit the use of variety
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Based on the five dimensions, a formula for motivation potential
of a job is arrived at as follows: “Motivation Potential Score (MPS) =
s.
(1/3) X (Skill Variety + Task Significance + Task Identity) X (Autonomy
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X Feedback)”. It may be seen from the above formula that Autonomy
and Feedback are two dimensions, which have a multiplier effect on
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motivation, and hence a greater significance than the other three factors.
If one of the two factors is absent in a job, it will have no motivating
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an individual is confronted with an opportunity, constraint or demand
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related to what he or she desires, for which the outcome is perceived
simultaneously to be both uncertain and important. For example,
s.
employees might be stressed when performance review is taking place,
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during which a person is unsure of the nature of the ratings he or she
would receive. At the same time, the person is fully aware that while
la
the job. Though the stress might be work-related, they might have been
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Different types of Stress affects people’s work lives. Not all stress
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is not to entirely eliminate stress from people’s lives. Stress can have
positive effects. Positive stress or Eustress can help people to respond
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induce heart attacks or reduce appetite in a person. Alternatively, an
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employee who is experiencing a high level of stress may have psychological
impact and as a result might become depressed, compulsive in action,
s.
irritable, confused, bored, accident-prone, startled, argumentative,
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distracted, procrastination-prone or indecisive. Behaviorally related
symptoms of stress include changes in productivity, absence, turnover,
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their jobs as the most frequent cause of negative stress. Effects of stress
include some of the most serious and life-threatening ailments known
in the field of medicine. Therefore, organizations have begun concerted
efforts to enable employees to effectively handle the inevitable stress.
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counselors in meeting various psychosocial problems of their employees
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like drug and alcohol abuse, sickness and disability, indebtedness and
family breakdowns.
s.
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People vary in their relation with stress. One style of relating is
being stress-seekers who thrive on challenge, risk and sensation. Stress-
la
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fast moving consumer goods (FMCG) are rated to be the most stressful
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industries. Some individuals with aggressive, ambitious personality
types are more prone to stress than other types who are patient, tolerant
and calm. s.
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In terms of organizational factors, any attempt to lower stress
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would have to begin with employee selection, during which care has to
be taken to ensure that an employee’s abilities match the requirements
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decisions and to gain social support have also been found to lessen the
burdens arising out of stress.
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modern organizations occurs due to the demands of meeting targets and
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deadlines at work. For many employees, change creates stress. A dynamic
environment characterized by takeovers, mergers, restructurings, forced
s.
retirements and mass retrenchments has created a large number of
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employees who are stressed out.
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whole workforce was divided into three categories namely the top 20% of
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best performers, the middle 70% of average performers and the bottom
10% of poor performers. While the first two groups were rewarded in two
.a
different ways, people in the third group were earmarked for summary
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year were supposed to have performed not only better than last years and
better than the targets, but also better than at least 10% of the people.
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is arousal that takes place during an experience. Stress could also be
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residual at times, in which the arousal continues to remain even long
after the stressful event has passed. Inability to overcome the trauma of
s.
an event is the cause of residual stress. Lack of support during and first
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aid immediately after stressors could be the causes of residual effects on
people. Stress could be reactive to specific situations or endogenous or
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Rational thinking, realistic self-talk, re-examining assumptions
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and beliefs being held for a long time, praying, solitude and contemplation,
s.
being in nature, reading and writing, hypnosis, bio feedback and auto
suggestion, music, yoga, hydrotherapy, massage and humor are some of
bu
the need-based stress management strategies advocated by organizers of
workplace wellness programs all over the world, to recuperate employees
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the strength of its internal systems and the satisfaction of its various
stakeholders. QWL and organizational effectiveness are considered to
be twin goals of an organization.
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of jobs over the worker. The first movement phase was extended until
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1974 – in the USA - when there was an interest fall by QWL in function
of economic questions - energy crisis and increasing inflation. The
s.
survival needs of companies made employees’ interests move away
from QWL.
bu
After 1979 the concern with QWL resurged mainly because
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positive and negatives points of the work is ample. There are concepts
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making it more democratic and involving employees in making
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decisions affecting them. The conditions that contribute to motivation
such as equitable salaries, activities such as job enrichment and job
s.
rotation would also contribute QWL. Thus, QWL clearly exhibits
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features that have also been associated with the very basic objectives
of Human Resources Management, Employee Relations and Labour
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Welfare.
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QWL of human capital, lies in the fact that most people who work for
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QWL is a term that has been used liberally over the years, to
describe everything from flexi time to self-directed work teams. QWL
is designed in many organizations to be joint union-management
programs to improve organizational effectiveness and productivity
as well as working conditions. A network of labour-management
committees, ably led by a steering committee, usually guides these
efforts. QWL programs in these firms are wider in scope than Quality
Circles and they often involve redesigning or “broad-banding” jobs
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and/or changing the work processes. The aim of the programs is
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workplace wellness among employees, organizational health and
stability, and high performance work organizations.
s.
bu
Introduction of the principles of QWL in many organizations
have resulted in efforts towards humanizing the workplace by
la
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needs of socially determined standards of living and in order to
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ensure a just balance between effort and rewards.
ӹӹ Safe and healthy working conditions: Including hours of
s.
work and rest pauses, freedom from occupational hazards,
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accidents, negative stress, life-threatening conditions and other
factors detrimental to the well-being of employees
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more concerned with the overall climate of work, the impact of work
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on people as well as organizational effectiveness. It is based upon
the idea of Quality of life, which is a culture attribute that reflects
s.
the emphasis placed upon relationship and concern for others. An
organization could be considered effective only if the QWL features
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are satisfactory according to the employees. The more an enterprise
is committed to the assurance of QWL, the more it will encourage
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position.
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Summary
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to each other. Motivation, the process of stimulating people through
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the possibility of gain or reward, to take desired course of action in
the interests of the organization applies to the entire class of drives,
s.
desires, needs, wishes and similar forces. Motivation is enhanced by
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a fair and decent compensation, accompanied by any of the proven
incentive systems. A blend of motivation and competence in a system
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10. Describe the nature, causal factors and the manifestations of employee
Morale.
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11. Define Stress. List out and explain the phases of reactions to Stress.
s.
12. What are the causes, symptoms, types and consequences of job linked
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stress?
13. List out and outline the various stress management initiatives that
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Case Study
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responsibilities during the early hours in order to be fair to this group
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of people. The question in the minds of the Personnel Manager was how
to be equitable to all during that day when neither the management nor
s.
the employees could be blamed for the happenings. Equal-pay-for-equal
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work is the norm that contradicted with the condoning of late coming
due to extraneous factors.
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Questions
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Glossary
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that would facilitate and boost an individual’s performance.
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10. Distress: Negative stress that lowers the effectiveness of functioning
of a person.
s.
11. Burnout: A debilitating condition of physical, emotional and mental
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exhaustion and cynicism that occur due to prolonged exposure to
stress.
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****
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UNIT -V
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determine the reward for effort and other conditions of employment, to
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protect the interest of the employee and their employers, and to regulate
the ways in which employers treat their employees”.
s.
The International Labour Organization (ILO) stated that
bu
“industrial relations deal with either the relationships between the state
and employers’ and workers’ organizations or the relations between the
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From the various definitions given above, we understand that:
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ӹӹ The state and the legal system also have a role to play in the
maintenance of a conflict- free industrial environment
ӹӹ The different parties in the system with a well-defined role are
the management, the employees and the unions.
Concept
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and the economic growth of the country. Through good
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industrial relations only, the enterprise can move towards the
welfare of the employees and the management of the concern.
s.
ӹӹ Industrial relationships is the compromise result of the attitudes
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and approaches of the employees towards each other with regard
to the planning, supervision, direction and co-ordination of the
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organization.
.a
ӹӹ The term Industrial relations has been looked upon and worded
differently by different pioneers of the field.
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the term industrial relations has been widened in its meaning and now
it implies –employers- employees – unions and government relationship
in industry.
Objectives
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ӹӹ To improve the bargaining capacity of the workers through trade
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unions.
Importance s.
bu
ӹӹ IR is a key for increased productivity in industrial establishments
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economic conditions.
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ӹӹ Psychological approach
ӹӹ Sociological approach
ӹӹ Human relations approach
ӹӹ Socio-ethical approach
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ӹӹ Gandhian approach
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ӹӹ Systems approach
Psychological Approach s.
bu
According to this approach, most of the problems in industrial
relations arise because of the differing perceptions and attitude of the
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Sociological Approach
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Socio-Ethical Approach
Gandhian Approach
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industry should be solved through satyagrahas and non-violence rather
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than resorting to violent deeds and crimes.
Systems Approach s.
bu
The basic elements of the system approach are the participants,
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Employees
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Trade Unions
The Management
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The management plays a critical role in the industrial relations
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of an organization. Management policies can help in maintaining high
employee morale and in preventing industrial conflicts and disputes.
s.
bu
The Government
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unions and the employees are expected to work for the common good of
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the organization. The government comes into the picture only when the
three players fail to do this and is unable to sort out their differences.
.a
Individualized thinking
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Policy awareness
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IR DECISIONS
co
Communication
s.
bu
The core of an IR programme is the personnel manual. The manual
sets out the rules and policies within which managers and employees
la
must operate. All employees and supervisors are fairly familiar with the
contents of the manual.
yl
lls
Relations
.a
Competence
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Since industrial relations are a functional staff service,
co
it must necessarily derive its authority from the line
organization.
s.
bu
Sound Personal Policies
la
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Follow up of results
Questions
m
suggestions to improve the legislation concerning industrial relation
to our country.
co
3. Explain clearly the machinery provided under the industrial dispute
s.
act 1947 for the prevention and settlement of industrial disputes.
bu
4. Define a grievance and indicate the organizational responsibility
and principles or guidelines for handling grievances in an industrial
la
grievance.
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Meaning
m
workmen or between employers and employers or for imposing restrictive
co
conditions on the conduct of any trade or business and includes any
federation of two or more unions.
s.
bu
Nature of Trade Unions
An analysis of the above definition reveals that trade union must be:
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Origin
m
as individuals could not protest against it and therefore those
co
(workers) similarly situated, economically and socially and
closely associated with the work of the same employer developed
s.
mutual understanding and a common solution of their problems
bu
of living and this crystallized them into a self-conscious group
what we may call as Trade union.
la
of the concern.
.a
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Functions
m
ӹӹ The provision of social services such as insurance against old
co
age, unemployment, strike, pay, payment for hospital fee, legal
services, etc.
s.
ӹӹ Wage bargaining i.e. collective wage bargaining with the
bu
employers.
la
ӹӹ Political activities, i.e. the political pressure for reform, e.g. trade
union legislation works to protect the union and the workers from
lls
Objectives
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fund, compensation for injuries, etc.
co
ӹӹ To ensure for the workers, better health, safety and welfare
standards.
s.
ӹӹ To have a voice or participation in the factory management.
bu
ӹӹ To ensure that workers get respect and human treatment from
the foremen, managers, etc.
la
Principles
w
w
ӹӹ Unity is strength
This fact has been very effectively brought out by Longfellow in
the song of Hiawatha:
“ All your strength is in your union,
All your danger is in your discord;
Therefore, be at peace henceforward,
And, as brothers, live together.”
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circumstances to do so; and because they want:
co
ӹӹ To get economic security; that is, they want steady employment
with an adequate income
s.
bu
ӹӹ To restrain the management from taking any action which is
irrational, illogical, discriminatory or prejudicial to the interests
la
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ӹӹ Business unions
m
It is that emphasis upon the economic advantages to be bargained
through collective action and thus aim at improving the wages,
co
working hours and conditions of workers and similar other
objectives largely through the process of collective bargaining.
ӹӹ Predatory unions
s.
bu
It is that serve as a means for the enrichment of its leaders who
la
its objectives.
w
These are unions that rely upon the support of the employer or
company management or the other large groups and hence they
are likely to pay secondary importance to the interests of members
ӹӹ Friendly unions
These are unions which are idealistic, conservative and law
abiding and they mainly aspire to elevate the moral, intellectual
and social life of workers to improve the conditions under which
they work, to raise their material standard of living and provide
them security against unemployment, accident, disease or old
age. They depend upon the process of collective bargaining for
the attainment of their objectives.
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ӹӹ Revolutionary unions
These are unions that are extremely radical both in view- point
and action. They are class conscious and tend to repudiate the
existing institutional order, especially individual ownership
of productive means and the wage systems. They are strongly
inclined towards strike and violence and look upon unionism and
socialism as the two wings of the labour movement.
m
and specialization, no matter in what industry or trade they are
co
employed.
ӹӹ General labour unions, which aim at becoming all embracing
s.
organizations accepting as a new member practically any wage
bu
earner whatever the place or character of his work or whatever
his industrial qualifications may be.
la
independent unions.
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identity. Trade unions help the worker in regaining his social life.
co
ӹӹ Protest approach of Kerr, Dunlop and others.
Trade union is a form of organized protest against the evils of
s.
industrialization. Besides bringing about a basic change in the
bu
relationships between man and his work and between man and
his cultural setting, industrialization inevitably circumscribes
la
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economy. Unions are becoming increasingly mature, responsive
co
and realistic in their thinking and action. Gone are the days of
catcall strikes, bandhs, gheraoes and violence.
s.
ӹӹ Depoliticisation of unions is another trend witnessed these
bu
days. The trend towards depoliticisation started in the 1960’s
and received further boost in the post-liberalization era. The
la
employees.
ӹӹ One of the defects of the trade union movement in our country
has been the phenomenon of outside leadership. Individuals who
were not connected with a factory would assume the leadership
mantle of the union.
ӹӹ The clout of the central trade unions, which peaked during the
post nationalization years, has started waning. One of the reasons
for this trend is the gradual realization on the part of the workers,
who are young and well educated, that independent unions are
more advantageous than all India federations.
ӹӹ Faced with the problem of declining membership and the fear of
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co
To be successful, a trade union:
s.
ӹӹ Should be enlightened one, so that it may be able to guide and
direct the trade union movement properly.
bu
ӹӹ Should have a solid foundation, so that it may be strong enough
la
leadership should come from the rank and file of its members.
w
ӹӹ Should look beyond its own horizon, and recognize and fulfill
its proper role in the life of the nation and of community in the
midst of which it lives and functions.
ӹӹ Should have a sense of responsibility. It should be internally
strong so that it may be effective in protecting the interests of
the workers.
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to stay away from unions. They may have misgivings about how effectively
a union can improve unsatisfactory working conditions. Collective
bargaining is not always successful. If union is not strong, it will be
unable to make an employer meet its demand. Even if an employer does
respond to union demands, the workers may be affected adversely. The
employer may not be able to survive when the demands of the union are
met, and thus the company may close down, costing the employees their
jobs. The organization may force the union to strike, inflicting economic
hardship on employees who may not be able to afford being out of work,
or it may in some cases, attempt reprisals against pro union employees.
Employees may strongly identify themselves with the organization and
view unionization as an attempt to weaken the company. They may object
to the concept of seniority or even the political activities of the unions.
m
Individuals feel that their value to the organization should be judged
co
on an individual basis and that everyone should not be treated equally.
If their performance is superior, the rewards should be appropriate
s.
and direct. These individuals feel that joining unions would limit their
bu
opportunities for advancement.
la
authority,
w
ӹӹ Effective supervision
ӹӹ Open communication
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of trade unions and to give registered trade unions a legal status, and
immunity to their office-bearers and members from civil and criminal
co
liability in respect of the legitimate trade union activities.
1. Definition (s.2)
2. Registration of unions (s.3 to 12)
.a
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Employers Organisations
m
Standing Labour Committee, the employers approach to labour
matters.
co
Like trade unions, employer’s organizations too are organized at
s.
three levels in our country. There are local organizations, such as Bombay
bu
Mill Owners Association, which serve the needs of local employers only.
Then there are regional organizations, such as the Southern India Mill
la
follows:
w
(FICCI)
w
The general functions that federations perform are of the following four
types:
ӹӹ Communication
They keep members informed of all new labour laws, shifts in
labour policy, important court decisions on labour matters and
important tripartite deliberations.
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ӹӹ Advice
They advice members on complex legal provisions when such
advice is sought.
ӹӹ Representation
They represent employer’s point of view before the government
on all labour problems.
ӹӹ Education
They educate members on important labour issues by holding
seminars, conferences and training programmes.
m
co
ӹӹ Undertake promotion of collective bargaining at various levels.
ӹӹ Encourages observance and implementation by their members
of bipartite and tripartite agreements. s.
bu
ӹӹ Expedite implementation of wage awards by members.
la
partnership in industry.
w
Questions
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co
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s.
bu
la
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lls
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co
Every human being (say a worker) has certain needs. E.g.,
economic needs, social needs and needs for security. When these needs
s.
do not get satisfied, there arises a conflict between labour and capital. A
conflict means a struggle or clash between the interests of the employer
bu
and the workers. When an industrial conflict (which otherwise is general
in nature) acquires a concrete and specific display or revelation, it
la
for negotiations.
.a
Forms of Disputes
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Types of Disputes
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ӹӹ Disputes of Right, which relate to the application or interpretation
co
of an existing agreement or contract of employment; and
ӹӹ Disputes of Interest, which relate to claims by employees or
s.
proposals by a management about the terms and conditions of
bu
employment.
la
judicial decisions which have been handed down by courts and tribunals,
lls
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Psychological Causes
m
ӹӹ Clash of personalities
co
ӹӹ Authoritarian Leadership (administration)
ӹӹ Demand for self-respect and recognition by workers.
ӹӹ Strict discipline s.
bu
Institutional Causes
la
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Economic Causes
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ӹӹ Inadequate wages
ӹӹ Undesired deduction from wages
ӹӹ Poor fringe benefits
ӹӹ No bonus or other incentives, etc.
m
orders, etc
co
ӹӹ Violation of already made mutual agreements (i.e. between
employer and workers).
ӹӹ Collective bargaining
.a
ӹӹ Voluntary arbitration
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ӹӹ Code of discipline
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Collective Bargaining
Voluntary Arbitration
m
make a decision which is usually binding upon the union i.e.,
co
one primary party and the management (i.e. the second primary
party)
s.
ӹӹ Many industrial disputes have been and are being settled today
bu
through voluntary arbitration.
ӹӹ The industrial Disputes Act 1947 recognizes voluntary arbitration
la
Code of Discipline
.a
employers and workers. The code lays down specific obligations for the
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bargaining will be useful, it may advise, encourage or even impose
collective bargaining as compulsory on the two parties to settle their
co
disputes through negotiations and discussions.
s.
Compulsory Establishment of Bipartite Committee
bu
A bipartite committee consists of representatives of workers as
la
well as of the employer (at the factory level) Such committees work on
yl
the principle of “nip the evil in the bud” and settle labour management
lls
disputes as soon as they appear and do not permit then to grow and take
an unmanageable shape.
.a
to:
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ӹӹ A conciliator aids resolving the differences between two parties
co
and keeps them to understand and appreciate the situation
better.
s.
ӹӹ Mediation is a process by which the third party attempts
bu
to stimulate labour and management to reach some type of
agreement. The mediator cannot decide the issue. He is strictly
la
Compulsory Investigation
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Grievance Procedure
m
ӹӹ Unvoiced or stated by the worker,
co
ӹӹ Written or unwritten, and
s.
ӹӹ Valid or ridiculous, and may arise out of something connected
bu
with the company, e.g., company policy or actions
la
authority;
ӹӹ Ask the employee to give his complaint in writing;
ӹӹ Permit the worker to appeal against the decision taken at lower
level and lastly
ӹӹ The grievance procedure should be made, realizing the
importance of industrial harmony and good labour relations.
ӹӹ
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Step 1
The aggrieved employee presents his grievance in writing to his
foreman or supervisor; he puts his grievance to union representative who
also is a full time employee of the company. If the foreman, aggrieved
employee and the union representative fail to work out a settlement of
grievance, the dispute in the written form is sent to a higher step in the
procedure.
Step 2
m
union committee man; a union committee man supervises several union
co
representatives and is specialists in union management negotiations.
If the situations still remain unsettled, as the third step, the case is
forwarded to top management and top-union officials.
s.
bu
Step 3
la
the grievance, which by this time has become an issue that has political
lls
Step 4
w
If top management and union leaders fail to settle the issue, the
w
fourth step, then, is to submit the same to an impartial arbitrator for final
decision as to the action required. A failure to settle the issue at the step
4 may result in strike, picketing, Gherao or lockout. It is the best if the
grievance gets settled at the level of supervisor and union representative.
Questions
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co
s.
bu
la
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lls
.a
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resolving industrial disputes. It occurs when representatives of a labour
co
union meet management representatives to determine employee’s wages
and benefits, to create or revise work rules, and to resolve disputes or
violations of the labour contract. s.
bu
The bargaining is collective in the sense that the chosen
la
management.
lls
Concept
.a
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The main features of collective bargaining are:
co
Group Activity
s.
bu
Collective bargaining is a group activity because the parties
involved in the bargaining process represent different groups
la
yl
Activity Levels
lls
level.
w
Flexibility
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Builds Relationships
m
performance in achieving the desired results.
co
Objectives
s.
bu
Collective bargaining has benefits not only for the present, but
also for the future. The objectives of collective bargaining are:
la
involved
ӹӹ To resolve all conflicts and disputes in a mutually agreeable
w
manner.
w
signed contracts
ӹӹ To develop a conducive atmosphere to foster good industrial
relations
ӹӹ To resolve issues through third party (government) involvement
in case of conflicting interests of the practices involved.
ӹӹ To provide stabile and peaceful industrial relations in the
organization
ӹӹ To enhance the productivity of the organization by preventing
strikes, lockouts etc.
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Approaches
m
ӹӹ As a system of industrial jurisprudence
co
It is a rule-making or legislative process, in the sense that
it formulates terms and conditions under which labour and
s.
management will co-operate and work together for a specific
period.
bu
Importance
la
yl
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Preparing for negotiation
co
Careful advance preparations by employers and employees are
s.
necessary because of the complexity of the issue and broad range of
bu
topics to be discussed during negotiations. Effective bargaining means
presenting an orderly and factual case to each side.
la
yl
These include such topics as how basic wage rates are determined,
cost of lining adjustments, wage differentials, overtime, wage
adjustments and the like.
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Institutional Issues
Administrative Issues
Negotiating
m
co
Preparations having been made and issues been identified, the
next logical step in the collective bargaining process is negotiation. The
s.
negotiation phase begins with each side presenting its initial demands.
bu
The negotiation goes on for days until the final agreement is reached.
la
After an initial agreement has been made, the two sides usually
lls
and precise.
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ӹӹ The role of a third party should be minimized and agreements
co
should be based on bipartite bargaining.
ӹӹ All the parties involved should aim at a win-win situation and not
s.
a win lose situation. The common interests of the organization
bu
and its employees should be taken into consideration while
reaching any agreement.
la
yl
Questions
lls
process.
w
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“Discipline is employee self-control which prompts him to
co
willingly co-operate with the organizational standards, rules, objectives,
etc.”
s.
bu
An employee is subjected to disciplinary action when he fails to
meet some obligations towards his job or the organization. The primary
la
Objectives
.a
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Types of Discipline
m
Discipline”. The attitude and mindset of the employees is developed to
ensure that they willingly conform to the rules and regulations of the
co
organization.
s.
If employees are forced to follow the rules and regulations
bu
of the organization by inducing fear in them, then it is referred to as
“Negative Discipline”. In this type of discipline, the employees fear
la
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Attendance
m
On the job behavior
co
An employee’s behavior should be in accordance with the rules
s.
and regulations laid out by the organization. Any behavior that hampers
the work of the individual or disturbs the performance of other employees
bu
demands disciplinary action. Reasons for such acts of indiscipline can
be:
la
yl
Dishonesty
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ӹӹ When an employee has to perform a job that does not suit his
co
qualifications, experience or aptitude, it can lead to employee
frustration and demotivation. This can lead to acts of misconduct
s.
like irregular attendance, tardiness at work etc.
bu
ӹӹ Strained relationships with the supervisor or with colleagues can
force an employee to indulge in acts of indiscipline similar to the
la
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working conditions, Separate rules have to be framed for
co
employees in the office and in the field.
ӹӹ The rules should be so formulated that they ensure an objective
s.
and unbiased analysis of the acts of indiscipline. Every employee
bu
should be treated the same way under the disciplinary procedure.
ӹӹ All the employees should know the penalties for violation of
la
repeated.
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Immediate
m
Impersonal
co
Regardless of who touches it, the stove causes burns.
s.
bu
Consistent
la
Disciplinary Procedure
.a
organization are:
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process of enquiry in an impersonal and objective manner. He
co
should refrain from making any judgmental comments.
Follow- up
.a
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Approaches To Discipline
Incorrect Discipline
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Late intervention: In case the manager ignores it and allows the problem
m
to continue, then solving it becomes difficult in the later stages. This is
co
referred to as a late intervention or procrastination discipline.
s.
Labeling employees not behavior: Managers sometimes tend to label
bu
employees because of their unsatisfactory performance on a job. Such
labeling has certain negative implications.
la
it is not the employee, but the management, that is responsible for the
lls
Preventive Discipline
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Positive Discipline
m
An approach in which unsatisfactory behavior of employees is
co
corrected through the support and positive attitude of the managers is
called positive discipline. This type of disciplinary process is positive and
s.
facilitates problem solving in a people oriented approach. This approach
bu
mainly lays emphasis on believing that if employees are treated fairly
and in humane manner they will follow the disciplinary process of the
la
Verbal Warning
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Written Warning
If the oral warning fails, then the next step is to give a written
warning to the employee. This is a formal stage as the written warning is
placed in the employee’s file and a copy given to the employee and one
sent to the personnel department.
Suspension
m
paid during this time. This kind of action helps in making the employee
co
realize his fault and the inconvenience that his behavior has caused to
others in the workplace.
s.
bu
Demotion
la
ӹӹ The employee clearly does not have the ability to perform the job
w
Pay cut
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Dismissal
m
of the code of discipline are as follows:
co
ӹӹ Both the management and the employees should abide by certain
s.
self-imposed rules in order to avoid disputes. In case disputes
arise, they should be settled through negotiation, conciliation
bu
and voluntary arbitration.
la
be indulged in.
ӹӹ There should be precision and speedy implementation of
disciplinary action and any agreements reached.
ӹӹ Employees and trade unions can take appropriate actions in case
they find offices and supervisors indulging in activities, which
are against the code.
ӹӹ The trade union must be recognized in accordance with the
criteria laid down for this purpose. Only unions that observe the
code of Discipline are entitled to recognition.
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Questions
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co
****
s.
bu
la
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lls
.a
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m
opportunity to the workers to take part in the management decision-
co
making. Worker’s participation is adopted and practiced differently in
different organizations. While in some places, the employees might be
s.
required to just give their suggestions and the final decision-making
authority vests with the management, in other places, the workers might
bu
be involved in taking only operational decisions. In some other places,
however, workers might get to actively participate in all the decisions of
la
Levels of Participation
Informative participation
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Consultative participation
m
Associative participation
co
The management is under a moral obligation to accept and
s.
implement the unanimous decision of the worker’s council. The workers
at this level of participation have a major role to play, when compared
bu
with the earlier two stages.
la
Administrative participation
yl
certain alternatives from which it can select the one it wants to implement.
.a
Decision participation
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other. This helps in reducing industrial conflict.
ӹӹ Participation enables equal distribution of power in industry so
co
that it tends to be shared among all those engaged in organizational
work.
s.
bu
ӹӹ Participation facilitates effective communication between the
workers and the management.
la
operations of production.
lls
.a
ӹӹ Ascending participation
ӹӹ Descending participation
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2) Informal participation
I Formal participation
m
ӹӹ Employee insurance plans, etc.
co
2) In ascending type of participation, the elected representatives of
workers participate in managerial decisions at higher levels such as
in the board of directors of the enterprise. s.
bu
3) In descending type of participation, workers participate in the
planning and deciding their own work on the shop floor.
la
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Suggestion schemes
co
Employee’s view on such matters as machine utilization, waste
s.
management, energy conservation and safety measures are invited,
bu
and reward is given for the best suggestion. This procedure enables
the management to arouse and maintain the employee’s interests in the
la
II Informal Participation
.a
foreman or supervisor.
Importance of Participation
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Morality and the impartial promotion of human welfare
co
Recognize the inherent value and dignity of the human being
The self-worth of the individual enhances
s.
bu
Participation relates to the mental and physical health of employees
Ethical justification for worker participation is derived from
la
organizations of work.
lls
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ӹӹ A healthy work atmosphere that motivates employees to
co
participate in the decision-making process. Frequent conflicts
s.
in industries frustrate workers and they do not show interest in
decision-making as they feel that the management is averse to
bu
proposals made by the workers.
la
of their goals.
lls
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ӹӹ Finally, it is important to evaluate the effectiveness of the worker
co
participation programs from time- to – time and if required,
necessary changes should be made to render them more acceptable
and effective. s.
bu
Questions
la
yl
industrial democracy.”Explain.
.a
2. Describe the function of shop council and joint councils under the
1975 scheme of participative management.
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References
m
co
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